- Below; maintain Underperform. 4Q10 core net profit of S$40m was only 13% of our FY10 estimate and 10% of consensus. FY10 core earnings of S$272m form 89% of our forecast, due to lower-than-expected yields. Revaluation gains for its Singapore (S$74m) and China properties (S$36m) were the main features of the results. NPI grew in 2010 as new malls were completed but average NPI yields remained sub-optimal at 5.5-6.8%. This should improve as more malls stabilise but could take time. Higher fund management income was the main positive. We maintain our estimates pending a results briefing this morning, expecting de-rating catalysts from the yield disappointment. Maintain target price of S$2.15 for now, on par with our RNAV estimate.
- Boosted by revaluation gains. 4Q10 EBIT fell 26% yoy to S$163m following the divestments of three malls in Malaysia and Clarke Quay. The impact was only mitigated by higher revaluation gains for properties in Singapore and China. Higher rental contributions from ION Orchard and fee income from its fund management business also cushioned the drop.
- NPI yields still sub-optimal. Average NPI yields rose slightly by 30-100bp in FY10 based on FY09 property valuations, indicating better rentals. That said, average NPI yields remained sub-optimal at 5.5-6.8% across Singapore, China and Malaysia. Such yields were still below CMA’s target of 8-9% during its listing. Total NPI in Singapore and China increased 19-21% yoy as new malls came on stream. Management wants to open another 15 malls in the next 3-4 years. This should keep NPI yields growing, even as older malls start to mature. However, we believe the improvement could take some time.
- Acquisitions. CMA hopes to deploy over S$2bn in 2011 for acquisitions. Likely targets are retail malls in China and Malaysia, in our view. CMA plans to double its China malls to 100 in the next 3-5 years.
Source
No comments:
Post a Comment