What is the news?

CapitaLand (CAPL) achieved revenue of $1,110.9mn for 4Q12, +5%y-y, mainly due to higher sales recognition from Singapore and Australia, higher income from shopping mall business but partially offset by lower sales recognition from China and Vietnam due to fewer units being handed over to buyers. Share of results from associates and JVs were 24% y-y lower to $311.7mn. As a results, PATMI was $262.7mn (-45%y-y). Excluding reval gains, adj PATMI was $133.6mn, or -40% y-y due to lower gain from sale of investments. A final dividend of S 7 cents is proposed.

How do we view this?

Overall the results beat our expectations. Sales momentum in China continued to improve and we expect that to be reflected in its earnings as the project’s completions take place in the next 2 years. We are positive to note that the management is reviewing its non-core assets and further details to improve ROE will be coming out in the next 3 to 6 months.

Investment Actions?

We factor in the latest valuations in its various assets, and roll over our estimates to FY13. RNAV is increased from $4.18 to $4.26. Fair value is lifted to $4.05 with the same 5% discount to RNAV ascribed. Maintain Accumulate.

Source: PhillipCapital Research - 22 Feb 2013