Capitaland

CapitaLand: Deutsche likes CapitaLand’s well-diversified exposure to Asian real estate and is the largest retail mall owner and operator in the region. A streamlined and integrated platform across business units should help to improve execution capabilities. The favorable asset completion cycle in the next three years will also see the group’s operating PATMI grow at ~30% p.a., bringing the group’s ROE back to 11% by 2016, based on Deutsche’s estimates. Additionally, any cost savings would enhance operating leverage and provide an upside kicker to street estimates. Key risk is that a lack of investments could affect long term growth prospects. Deutsche has a Buy rating on CapitaLand with a TP of $3.95.