CAPITAMALLS Asia: For 2Q10, CMA reported a net profit of S$113.1m, 16.8% higher than 1Q10 although revenue was 2.2% lower QoQ. Excluding net attributable revaluation gain of S$12.7m, core net earnings were 11.6% higher QoQ at S$100.4m. This brings 1H10 net profit to S$210m and S$190m excluding revaluation gain. We note that growth was driven largely by higher contributions from the recognition of profits from Orchard Residences which increased to S$53m from S$38m a quarter ago.
With recycled capital from the successful listing of CapitaMalls Malaysia Trust and the sale of Clarke Quay for $268m, CMA plans to invest S$800-1bn of its proceeds in new projects in Singapore, China and Malaysia as part of its strategy to build its portfolio of retail properties for long-term growth. Three new malls in China are also scheduled to be opened in 2H10. Citigroup has a HOLD recommendation with TP of $2.30.
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