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CapitaMalls Asia: Any correction is a buying opportunity.

Saturday, November 3, 2012

CapitaMalls Asia's share price is enjoying a strong follow through after breaking resistance. Further increase in share price is likely to meet stronger resistance at $1.93, the 138.2% Fibo line. Overcoming this resistance level would see the next two golden ratios at $2.00 and $2.07 providing resistance.

It remains to be seen if $1.84 is resistance turned support. Stronger support is at $1.705 as that was a many times tested resistance that finally gave way after a period of seven months. Bears would have to be out in full force and more in order to push the share price below $1.705 as the bulls who missed the boat earlier would likely try to get on the boat at this very price, give or take a couple of bids.

All the daily MAs are rising and the picture has turned nicely bullish. Any correction to test supports would be a buying opportunity.

We reckon there may be opportunities for CMA to monetize some assets in 2013, such as Queensbay Mall and its 50% stake in ION Orchard. With continued strong underlying performance from the malls, we maintain our BUY recommendation. Target price is raised to SGD2.25. (Maybank Kim Eng, 29 Oct 12)

Related post:
CapitaMalls Asia: Broke resistance.


Ah John said...

CMA should be considered as developer? Not pay much dividend.

AK71 said...

Hi Ah John,

CMA is a developer and more. :)

B said...

Picked this up when it was at the very low of 1.1+. Current price to ride on the rising wave does looks slightly expensive or fairly valued i would say.

AK71 said...

Hi B,

I bought some earlier in the year when it tested new lows too.

$1.1+ was way too cheap. It would be assuming that CMA's Chinese properties would be worth next to nothing.

I do not think current price is expensive but it is definitely not as cheap as it was a few months ago. ;p

AK71 said...

CMA reported a good set of 3Q results with a 71% rise in net profit to S$62.4m on a 53% increase in revenue to S$102m. The improvement came across all its
investment and management fee businesses, largely from leasing
commission with the opening of 6 China malls during the quarter as well as higher contributions from the increase in stake in its Japanese malls and acquisition of Olinas Mall. This was partly moderated by higher interest
costs from drawdown of loans to fund new investments. YTD, it has
achieved 87% of our full year forecast.

Target: $2.15

Signs of earnings inflexion - DBS Group Research

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