CMA

CMA: CS visited CMA’s malls in Xi’an (CapitaMall Xindicheng) and Beijing (CapitaMall Tiangongyuan and the recently acquired Grand Canyon Mall) over the wk end. Despite having only one mall in Xi’an, the house believes mgt is likely to increase there on the back of strong govt initiatives on the city’s economic and social devt. In line with the Beijing govt’s efforts to develop South Beijing, CMA has bought two malls in the past 1.5 yrs in Fengtai and Daxing. Key challenges in China retail sector remain staffing and competition. However CMA hopes to play on scale and its track record to mitigate some competition pressures. CS expects CMA’s earnings momentum to improve in the coming quarters led by , i) China, with a higher percentage (70% of China NAV) of malls opened, and ii) Singaproe, with the opening of Westgate and Bedok Mall in 4Q13 (>75% and >90% pre-leased, respectively). The house believes the stock price weakness present a buying opportunity. At 1.04x P/B, CMA is trading below its historical P/B avg of 1.15x. CS reiterates Outperform with TP $2.58.