Capitaland

Capitaland: UOB Kay Hian maintains Buy with $4.45 TP. House see value emerging from CapitaLand, which has been sold down 32% from its February high, worse than any of the S-REITs. The recent China acquisitions totaling $763.5m of a mixed site in Shanghai and a prime landed property in Singapore result in a RNAV accretion of 5 cents. (0.8%) The stock is currently trading at a steep 42% discount to its RNAV and a 30% discount to its long-term P/B value of 1.2x (vs 0.84 currently). An analysis of the past three cycles suggests a favourable risk-reward ratio of 3.2x (upside 154%/downside 43%) using the average of the upcycle peak P/Bs as the gauge for upside potential and average of the downcycle trough P/Bs as the gauge for downside risk.