CapitaLand

CapitaLand | Buy

May 2 close: S$3.76

Fair value: S$4.26

OCBC Investment Research, May 2

CapitaLand's Q1 2018 results were in line with our expectations. Revenue and gross profit surged 53.3 per cent and 78.9 per cent year-on-year to S$1.4 billion and S$602.9 million, respectively. This was underpinned largely by stronger contributions from development projects in Singapore and China, rental income from newly opened and acquired properties and the consolidation of CapitaLand Mall Trust, CapitaRetail China Trust and Raffles City Singapore Trust from Q3 2017.

Profit after tax and minority interest (Patmi), however, dipped 18.8 per cent year-on-year to S$319.1 million due mainly to the absence of a S$160.9 million gain from the sale of The Nassim in Q1 2017. Excluding this and other one-off items such as portfolio gains and revaluation gains and impairments, CapitaLand's adjusted operating Patmi grew 25 per cent year-on-year to S$228.7 million, forming 24.8 per cent of our FY18 forecast.

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