• 3Q16 numbers in line
• Over 9k CN homes sold in 9M16
• Same-mall NPI growth stable

Firm set of 3Q16 results

3Q16 PATMI increased 28.4% YoY to S$247.5m while operating PATMI similarly rose 54.5% YoY to S$251.8m mostly due to stronger contributions from the group’s residential development segments in Singapore and China, its investment properties in Singapore, China and Malaysia as well as newly acquired serviced residences. In terms of the topline for the quarter, we similarly saw group revenue increased 27.7% to S$1,373.7m given stronger contributions from its Singapore and Chinese development projects, and higher rental income from its investment properties.

Overall, we judge this quarter’s results to be in line with expectations and we like the fact that the company has delivered a balanced set of results in an uncertain environment due to its diversified asset portfolio and robust recurring income streams.

Home sales in China remain buoyant

The group’s rate of home sales in China remains buoyant with 2903 units sold in 3Q16 (versus 2,422 in the same period last year). YTD sales in China now stand at a healthy 9,176 units sold, up significantly from the 6,492 units in 9M15. In Singapore, the group continues to de-risk its residential portfolio, selling 510 home units over 9M16 (versus 151 units in 9M16), and we understand the group’s unsold domestic inventory at S$1.9b now comprises only ~4% of CAPL’s total assets. Same-mall NPI growth across the group’s commercial malls portfolio appear stable with Singapore and Chinese malls clocking 2.2% and 5.2 growth rates, respectively.

Looking ahead, we expect 8 new malls to be opened in 2017 (6 in China, 1 in Malaysia and 1 in India). The group’s serviced residences unit, Ascott, expects to open 770 units in 4Q16 and delivers an additional S$74m of fee income from pipeline assets when they turn operational. Maintain BUY with an unchanged fair value estimate of S$3.68.

Source: OCBC Research - 10 Nov 2016