CapitaLand

CapitaLand | Buy

Aug 23 close: $3.39

Target price: $4

Broker: RHB Research, Aug 23

The counter is our top pick among property large caps. CapitaLand's recent acquisitions in Singapore and China demonstrate its continued efforts to recycle capital, and rebalance its portfolio mix.

The group has acquired a mixed-use site in Sengkang Central in partnership with City Developments, with a winning tender of $777.8 million or $923.6 per square foot per plot ratio.

We remain positive on the acquisition as we believe integrated developments are one of the core competencies of joint venture partners.

CapitaLand has also announced the award of two prime residential sites in Guangzhou for 2.05 billion yuan (S$409.3 million). With the expected handover of more than 8,000 units from the third quarter, the move is a timely replenishment of its land bank.

Management noted during a recent briefing that it is in a good financial position to capitalise on any opportunities arising from the recent cooling measures.

Its balance sheet remains healthy with gearing at 0.5 time, and 73 per cent of its debt is fixed.

Its share price also remains well supported by dividend yields of 4 per cent, and continued share buybacks.

Key catalysts include sizeable mergers and acquisitions, and unlocking value through selective divestments.

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