• CapitaLand’s 2Q18 PATMI ahead on strong revaluation gains. 
• Targeting a balance of 50%-50% exposure in developed and emerging markets to ride through market cycles better. 
• Strong pipeline of pre-sold residential projects in China to underpin near-term returns. 
• Retail malls showing resilient operational performance. 

Rebalancing Strategy Bearing Fruit

Maintain BUY, Target Price S$3.62. With only one project to be launched in 2019, we see limited impact on CapitaLand Limited (CAPL) from the recent tightening policy measures given its Singapore residential exposure forms only 5% of RNAV.

With its core retail business and development business in Singapore and China on an uptrend in 1H18, we believe that CapitaLand will deliver strong earnings momentum in 2018. A strong balance sheet with low gearing offers financial capacity to undertake opportunities.

Our Target Price is based on a 25% discount to RNAV.

Source: DBS Research - 10 Aug 2018