CapitaLand

CapitaLand: Goldman Sachs reiterates Buy, notes CAPL’s underperformance is unjustified given, i) China contributes 42% to CAPL’s gross asset value, ii) Strong residential sales momentum and firm underlying retail trends across its portfolio in China, and iii) Better-than-expected S’pore residential sales. Goldman sees positive read across from the strong sector wide China residential sales, with broader China sales volumes up 23% y/y and 39% m/m in Sep. Similarly, peer Keppel Land delivered strong pre-sales in 3Q, hence CAPL is expected to deliver sequential improvement in 3Q (~900 units, Rmb1.6-1.7b) vs 736 units (Rmb1.3b) in 2Q13. Goldman keeps its TP $3.70 unchanged. Views valuations as attractive, with CAPL trading at 36% discount to NAV, implying a deep 50% discount for its residential arm.