Capitaland

Capitaland: In-line sales but higher than expected profits from revaluation gains. Rev at $740.4m +25.0% yoy with net profit at $399.0m +17.4% yoy. Net profit excluding revaluations and impairments came in at $171.3m +26.6% yoy. Co booked revaluation gains of $110.8m from its own properties and $223.8m from associates. Other one-offs included $157.2m of divestment and financial mark-to-mkt gains. On core operations, higher rev was from developments project in Sg and China but partly offset by lower rev from Australia and divested properties. For 1H2011 overseas operations formed approx 62.2% ($840.6m) of rev with China and Australia as main contributors.

Sg Rev for 2Q and 1H was higher than prev periods, underpinned but contributions from Interlace and Wharf Residences as well as rev recognition for Urban Resort Condo. In 2Q2011, 2 new projects were launched in China and more units were released for sale from 4 other devs. Ascott’s contributions largely due to divestments to Ascott REIT but has secured a total of 14 new mgmt contracts YTD. Co remains positive on Sg and China mkts and on Chinese economy but appreciation of SGD is an ongoing concern.

At NAV of $3.29, co now trades at P/B of 0.9x.