CapitaLand: Delivered 1Q16 headline profit of $218.3m (+35.4% y/y), with core earnings of $152.8m (-1.6%) meeting 21% of consensus full year estimates.
- Revenue slid 2.3% to $894.2m in absence of a fair value gain (1Q15: $59.6m) and lower recognition of development projects in Singapore and Vietnam, mitigated by healthy handover value in China.
- Overall EBIT climbed 20.1% to $458.2m mainly on fair value gains ($83.6m) from the divestment of Somerset ZhongGuanCun Beijing, improved contribution from CapitaGreen, shopping malls and development projects in China, as well as lower divestment losses.
- Going forward, the group expects the impact of the property cooling measures in Singapore to continue to weigh on the market. In 1Q16, the Cairnhill Nine project was launched and 193 out of the 268 units have been sold as at 14 Apr. Two other projects The Nassim and Victoria Park Villas are ready for launch in 1H16.
- In China, residential sales performance in China is expected be on track for the rest of 2016 despite the recent cooling measures imposed in Shanghai and Shenzhen. For the next nine months, CapitaLand has over 5,000 launch-ready units and expects to complete over 9,000 units.
- The street remains generally bullish on the counter with 16 Buy, 3 Hold and no sell ratings with average TP of $3.79.
Latest broker ratings:
UOB Kay Hian maintains Buy with TP of $4.08
Maybank KE maintains Buy with TP of $3.95
OCBC maintains Buy with TP of $3.68
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