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CapitaMalls Asia: Net profit up 42.6%.

Friday, February 10, 2012

In July last year, I put in a buy order for shares of CapitaMalls Asia because I felt its numbers showed it to be doing well but buying when its price was still firmly in a downtrend proved to be a mistake.

More than half a year later, fundamentally, things are still looking strong while technically, the downtrend has been broken, presenting a more promising picture.

I would be rather surprised if the low of $1.12 would be tested again. Why? Breaking out of the top of a base formation, it is more likely that we would see some support at $1.38 or so in the event of a pull back. Technically, we want to buy on retracements in an uptrend. Buying at supports could prove rewarding.

Some numbers:

Gearing level: 3.9%
NTA per share grew to $1.60
Final dividend of 1.5c per share proposed.

See slides presentation: here.

With more than 50 per cent of its China malls expected to be operational this year, the mall developer said 2012 will be "an inflection point".  Source: CNA. Read article: here.

Related post:
CapitaMalls Asia: Interim dividend declared.


Ray said...

hmmm, AK, do you think CapMall Asia is kind of overpriced?
Yes, its retracting alittle and may fall abit more to 1.38 but the NTA is only 1.6 per share.

China's economy is also rumoured to have a hard landing so that makes CapMall Asia whose business is very China focused, not that attractive?

My 0.02

Joseph Tan said...

hi AK,

need a bit of clarification. In their FY statement, it is stated that FY2011 - profit before taxation is $568,559 while FY2010 (re-state) profit before taxation is $577,809. What does re-state means ? Does the figure means that their profit decreases ?

AK71 said...

Hi Ray,

There are many rumous out there about China. I will treat rumours as rumours. ;p

When its NTA was $1.50 per share, did you think $1.12 was overpriced too? Overpricing as a concept is like many other things subjective.

Fundamentally, I can say it is undervalued simply because it is trading at a discount to NTA. Technically, I can say that it has emerged from its downtrend. Are these good enough reasons to buy on retracement? I will leave the question open. ;)

AK71 said...

Hi Joseph,

Profits are restated if an error is found. So, there was probably an error in FY2010 profit statement. That is what my rudimentary knowledge of accounting tells me. Not a big deal, I guess.

Howyuan said...

I noticed that most of the time, ARA and CMA move in tandem of each other. Wtih CMA soaring 10% in a single day, on wonders if ARA may do the same on result release day.

Then again, none of my business as i already unloaded ARA (as well as some short term holdings) last month. I like cash now.

AK71 said...

Hi Howyuan,

Indeed, the market is very much overbought. It should take a breather before attempting to move higher. Having more cash now certainly makes me feel more comfortable.

I am looking out for retracements.

Ray said...

Hi AK,

CMA retraced by about $0.10 so far.
Today a hammer has formed.
Would you be loading any of it soon?

Ray said...

Capitaland fell $0.10 as well :)

AK71 said...

Hi Ray,

Nope, not looking to load CPL and CMA currently. I probably have enough exposure to these two counters at current prices. :)

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