CapitaLand

CapitaLand: 1Q11 results largely in-line, adjusting for the new acctg policy. Similar to Keppel Land, CapL adopted INT FRS 115 wef 1 Jan 2011, restated 2010 accounts for comparison. This means income from overseas residential projects and Spore projects under the deferred payment scheme is recognized on a completion-of-construction basis, vs %-of-completion previously. Therefore income recognition will be lumpy and back-ended...

1Q11 net profit came in at $101.5m, vs restated 1Q10’s $29.8m. Revenue was $611.5m, +39% yoy, mainly due to higher contributions from devt projects, incl residential projects such as The Interlace and The Wharf Residence in Spore, Beau Residences and The Riviera in China; as well as commercial, industrial and residential projects in Australia...

While China residential sales was the major contributor to Group EBIT at 27%, Spore residential experienced the largest YoY growth in EBIT to $58.7m - a 350% improvement.
Mgt remains fairly confident of CapitaLand's planned launches this year, be it in Singapore or overseas. Also remains committed to deploying its capital towards accretive acquisitions in its core sectors and markets.
Balance sheet remains robust, with $6.3b in cash and a net gearing of only 0.2x...

Stock trades at 1.04x P/B, below the historical 5-yr avg of 1.6x.
Pre-results, the majority of Street had Buy ratings with TP ranging btwn $3.41 – 4.30.