What is the news?

CapitaLand started the year with 1Q13 revenue at $661.9mn (+3.2%y-y), mainly due to strong contributions from Singapore projects The Interlace, Urban Resort Condominium and Sky Habitat, as well as from China where units were handed over to buyers of The Metropolis in Kunshan. Portfolio gains in 1Q13 were also higher at $53.6mn arising mainly from the divestment of a residential development in Beijing. As a result, PATMI increased by 41%y-y to $188.2mn. If adjusted for reval gains, PATMI would have been 69%y-y higher.

How do we view this?

CapitaLand started the year with strong performance in its two core markets – Singapore and China despite mounting pressures to rein in rising home prices in both countries. We believe the strong sales achievements over the past several quarters have laid strong foundation for revenue recognition in the next 2 years.

Investment Actions?

We maintain our Accumulate recommendation with unchanged RNAV of $4.26 and target price of $4.05.

Source: PhillipCapital Research - 29 Apr 2013