The underlying sentiments towards Singapore residential and
commercial property markets has been getting increasingly positive.
On 4th Jan 2018, The Strait Times published an
article titled Property market finally on the upturn. In that article, analysts were quoted
saying that after three years of falling prices, 2018 is looking like the year
that the Singapore property market's long-awaited turnaround finally gains
traction.
In another news article dated 3rd Oct 2017, Tide has turned for office market, say
analysts, the industry watchers are predicting an office rental
recovery as the supply of new completions dwindles.
Here, we shall take a quick look at some of key matrix of
Capitaland.
Corporate Profile
CapitaLand is one of Asia’s largest real estate companies.
Headquartered and listed in Singapore, it is an owner and manager of a global
portfolio worth more than S$78 billion as at 31 December 2016, comprising
integrated developments, shopping malls, serviced residences, offices, homes,
real estate investment trusts (REITs) and funds. Present across more than 130
cities in over 20 countries, the Group focuses on Singapore and China as core
markets, while it scales up presence in markets such as Vietnam.
2016 Statistics
CapitaLand’s competitive advantage is its significant asset
base and extensive market network. Coupled with extensive design, development
and operational capabilities, the Group develops and manages high-quality real
estate products and services. It also has one of the largest investment
management businesses in Asia and a stable of five REITs listed in Singapore
and Malaysia – CapitaLand Mall Trust, CapitaLand Commercial Trust, Ascott
Residence Trust, CapitaLand Retail China Trust and CapitaLand Malaysia Mall
Trust.
(Source: Capitaland
Annual Report)
Financial Numbers
Revenue and net profits have been growing steadily over the
period despite multiple property cooling measures being implemented in its key
markets of Singapore and China. This demonstrates the management and business resilience
of Capitaland.
Its book values also have been increasing over the years
from the retained profits and appreciation of its investment properties. The
slight dip in 2016 was due appreciation of SGD against GBP, RMB and MYR.
Dividends
In line with its policy to grow core dividend on a
sustainable basis, Capitaland has been rewarding its shareholders with
increasing regular dividends over the years,. At the current share price, its
dividend yield is about 2.7%.
From the chart above, it can be seen that the current share
price of Capitaland is trading at low points of the Price Earnings and Price/Book ratios despite improving financial results over the period since 2010.
From its Q3 2017 results, the 9 months profits attributable
to owners of Company has reached S$1.283 billion, exceeding the annual profit
of 2010 and is the highest profit level since 2007. However, the share price
still has not managed to break above the highs of 2010 and 2013 post financial
crisis.
In early Jan 17, Capitaland announced disposal of 20 malls located in the Tier 3 China cities worth S$1.71
billion with a net gain of S$75 million, to focus on the Tier 1 and Tier
cities. Stock brokers cheered this move and some of them have upgraded
their target share price for Capitaland as follows:
Stock Broker
|
Target Price
|
CIMB
|
4.25
|
OCBC
|
4.13
|
RHB
|
4.20
|
DBS
|
4.35
|
Average
|
4.23
|
Technical View
Technically, Capitaland has recently broken both above its
short term down trend and resistance at $3.75 and may consolidate near this
level for a while before deciding next move.
Are there more legs to its upside?