CapitaLand

CapitaLand: 3Q13 revenue up 53% y/y to $1.05b led by higher contribution from the group’s devt projects in Spore, China, Vietnam and Australia, as well as higher rental revenue from its shopping malls. Net profit however declined 9% to $135.5m, due to i) a sharp decline in gross margins from 41.5% to 26.1%, as project costs of units sold in quarter were relative higher, and ii) lower portfolio gains (ie gains on asset disposal). In Spore, a total of 468 residential units (3Q12: 70) which amounted to a total sales value of $560m (3Q12: $166m) were sold. Sky Vue, launched end Sep, received strong response. 433 units or 86% of the 505 units released were sold, making it Sep’s top selling residential project in Spore. In China, 707 residential units with sales value of $216m were sold in 3Q13, mainly from The Loft in Chengdu, The Metropolis in Kunshan, Dolce Vita in Guangzhou and iPark in Shenzhen. Going forward, the group will focus on integrated and mixed devts. With a resilient Spore economy and policies to support population growth, the group believes that the demand for new homes and offices will remain positive. It will continue to invest in well-located sites to build up its pipeline of residential and commercial devts. The group is also positive about the property market in China as the outlook for the economy stabilizes. At $3.16, the counter trades at 0.85x P/B.