Capitaland

Capitaland: Nomura raises NAV estimate from $4.19 to $4.57, to chiefly reflect higher valuation of the list entities. Accordingly, raises TP to $3.87 from $3.50, with no change in the 15% discount ascribed. Nevertheless, the house downgrades to Neutral from buy, noting CapitaLand has outperformed the STI by 46% pts ytd in 2012. While Nomura remains bullish on CMA, believes the key question for CAPL at its current valuation is whether there is significant upside to other businesses, particularly residential devts, apart from CMA. Nomura estimates that the market is pricing in a discount of ~15% to the value of CAPL’s SG residential projects, which appears fair, considering inventory risk. Separately, it notes a key component of CAPL’s valuation is the China residential projects, which it estimates at ~20% of NAV. CAPL has sold c.2,000 units in China in 9M12 and plans to launch over 4,000 units for sale in China in 2013. The house notes better-than-expected sales in China is therefore a key upside risk for the stock.