Capitaland

Capitaland: After a recent roadshow, StanChart tips a good entry point into a developer uniquely positioned in China, upgrading the counter to OUTPERFORM (from In-Line) with $3.50 TP. Land prices in tier-one cities have risen 54% in the past 12 months, while home prices have risen 22%. Capitaland's strong branding and expertise in developing and operating residential, commercial and serviced-residence assets is a key differentiator, enabling it to work with policy makers and infrastructure providers to co-develop integrated developments at lower land costs. House views that its recent 20% stake sale in Australand is a positive development in line with management’s strategic decision to focus on its core markets of Singapore and China. House expect Capitaland to continue to reduce its exposure to Australia and expect a sharper focus on capital efficiency in 2H14.