I bought some last year because there were a lot of hype about this stock with properties in China and Australia and was still a laggard and cheapeast amongst the lights of CDL, Keppeland,Singland.
Greedy, still holding it thinking I might get some goodies in the form of MapleTree some other distributable REITS or maybe some casino fever may drive it sky high.
Saw Kim Eng's report that says the current RNAV is $2.12 and that its trading at 8% premium.This prompted me to check out what made him arrive at RNAV of $2.12.
(1) Took the balance sheet: (net asset - minority interest) / total ordinary shares and walah .... came up to $2.12 !!
(2) At $2.30 Trailing PER is 18.8. STill thinking, how can I project its 2005 earnings .... Any1 can shed some light.
(3) The property index is way higher that STI !
So from the quantitative aspect this analyst is right ....
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3 comments:
I believe the premium is due to it's large portfolio of projects in China, which has been booming these last few years. Be careful tho', the property bubble may burst any time :)
They hv already offloaded their malls (CMT) n commercial bldgs (CCT). Anything else to spin off as REIT? China Malls? China Office Bldgs? U can chk their annual report to see. I don't think MapleTree is related to them, more to Temasek.
When the yuan floats or revalues, the property bubble in China will bursts.
Friday July 8, 6:12 PM
UPDATE: CapitaLand To Take Stakes In 15 More China Malls
By Kevin Lim
Of DOW JONES NEWSWIRES
SINGAPORE (Dow Jones)--Singapore developer CapitaLand Ltd. (C31.SG) Friday inked an agreement to take a 65% stake in 15 malls across China for around S$687 million (US$404 million), strengthening an alliance with Wal-Mart Stores Inc. (WMT) to tap the mainland's fast-growing retail market.
CapitaLand already has stakes in six China malls that have the world's biggest retailer as the anchor tenant, and the latest deal with Wal-Mart's Chinese partner, Shenzhen International Trust & Investment Co. Ltd. (SZI.YY), or Szitic, will raise that figure to 21.
The announcement of CapitaLand's latest China deal comes one day after the company lost out in the bidding for Singapore's Business & Financial Centre site, the biggest tender of commercial land in the city-state since the 1997/98 Asian financial crisis.
As part of the deal with Szitic, CapitaLand, which gets nearly 70% of its earnings from overseas, has an option to invest in 17 other retail malls in China that will be anchored by Wal-Mart.
CapitaLand also gets a first right of refusal to participate in a commercial project under development in Shenzhen that will house the U.S. retailer's Asia head office and a Sam's Club outlet, which is a member-only warehouse operated by Wal-Mart.
The malls will be managed by a joint venture between CapitaLand and Szitic, which is owned by the local government of Shenzhen, a city in the southern Chinese province of Guangdong.
Speaking at a press conference, CapitaLand chief executive Liew Mun Leong said the partnership will give the Singapore developer a headstart in the fast-growing China retail property market "with the unique opportunity to penetrate the relatively untapped provincial cities."
Analysts were generally bullish about CapitaLand's latest foray into China, saying there are opportunities for faster growth and higher returns in the world's most populous country.
"We are very positive about retail in China," Standard & Poor's associate director for Asian equities research Lai Yeu Huan said.
In May, China's retail sales grew 12.8% from a year earlier, according to figures from the China National Bureau of Statistics.
CapitaLand said the 21 malls will cater to the basic shopping needs of the local population, with most having a gross floor area of between 30,000 and 50,000 square meters each.
The first of these malls, the Wal-Mart Supercenter in Jiulongpo district, Chongqing city, officially opened on June 30 this year, CapitaLand said.
Most of the malls will start operations between the end of 2005 and the end of 2006, and are expected to generate rental yields of around 8%-9% when operational.
CapitaLand, which is 61% owned by Singapore's state-owned investment company Temasek Holdings Pte. Ltd., plans to launch a listed China retail property fund with assets of S$500 million to S$1 billion next year, Liew said.
The fund's assets will come from among the Wal-Mart properties as well as CapitaLand's other malls in Beijing and Shanghai.
A China real estate investment trust will probably have to offer 200 basis points more than the yield on Singapore REITS, which is currently 4.5%-5.0%, to reflect the country and currency risks as well as the shorter lease on Chinese retail property, Pua Seck Guan, the chief executive of CapitaLand Retail, said.
Chinese retail properties generally have leases of 40 years unlike Singapore where leases are usually for 99 years.
CapitaLand, whose property and hospitality portfolio spans more than 80 cities in 28 countries, made a net profit of S$70 million in the first three months of 2005. That was up 43% from a year earlier, helped by higher asset management fees and an improved performance from its China operations.
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