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The share price of CapitaMalls Asia has been rising and with strong momentum too. Amidst bullish calls by research houses, I would not be surprised if its share price were to go even higher.
Citigroup adds CapitaMalls Asia (JS8.SG) to its Focus List.
"In the next few years, we expect China to be the key driver of CMA's earnings growth, as the company harvests gains from multi-year investments that have expanded its footprint to 36 cities in the country. The majority of the China portfolio is still in the growth stage, or in the process of stabilisation. India, from a low base, also offers significant upside potential," it says, expecting its Singapore exposure offers a visible stream of recurring income.
CMA's competitive advantages in China can't be easily replicated, including a strong brand equity and solid track record as a first-mover, ability to tie up with other local developers and access to a varied, cheaper pool of financing, Citi says.
"Moreover, CMA has an efficient capital recycling model (via three listed REITs and six private real-estate funds) that enables capital to be freed up for future growth opportunities, which offers upside to our earnings estimates." It tips CMA as its preferred pick among China's retail landlords and within Singapore's developers. It raises its target to $2.58 from $2.08 after increasing RNAV on changed China cap-rate assumptions; it keeps a Buy call.
| Dow Jones & Co, Inc |
| Friday, 01 February 2013 |
Today's long white candle day formed on the back of heavy volume is a good sign. Overcoming immediate resistance at $2.24 could see price hitting $2.41 next.
Related posts:
1. CapitaMalls Asia: To buy on possible weakness.
2. CapitaMalls Asia: Any correction is a buying oppotunity.
3. CapitaMalls Asia: Buy more at $1.93.
Bloggy Award
15 comments:
Fail to add on when CMA hit 2.12 in the vicinity of its 20MA a few days ago.
Weak in the presence of weakness. LOL
Hi seefei,
Well, as the share price goes higher, investors would really need stronger conviction to add to their long positions. We are only human. :)
I like the way you put it. "Weak in the presence of weakness." Haha.. ;p
AK, 2.12 is not a good enough reason to add to my sizable holding. I also dont have 20/20 foresight, tsk tsk...
CMA has the front seat of the rise in consumption in China. Just love this stock even though it gave me sleepless in its early IPO days. Die die must have stock in my portfolio LOL
Hi seefei,
I won't ask how many lots you have. Could give me a heart attack. Haha...
I didn't have this at IPO but I did buy some too early at under $1.90 as it was coming down. Bought more as it went down and also near the bottom.
Like you, I am convinced that it is in the right place at the right time doing the right business!
I thought I was crazy to commit so much to one stock at that time. I might have fewer sleepless night if I found your blog earlier. LoL
Hi seefei,
Hahaha... Now you have me curious.
I wonder how would have discovering my blog any earlier saved you from having sleepless nights?
Remember, I suffer periodically from insomnia myself. ;p
I will sleep better knowing there is a similar minded crazy guy on the same island holding onto a stock that had lost 50% of its value. We belong to the CIA - crazy investors anonymous LOL
Hi seefei,
Your comment has hit the nail on the head! Yes, I do not cut losses. It is something I have never learnt. ;p
If I were to believe that a stock is a good one, I would take advantage of lower prices to buy even more.
This stubborness, thankfully, has proven more rewarding than not in most cases.
Having said this, it does not detract from the fact that I got in too early. I call it a hedge, a smallish initial position. What if price were to go up instead? ;)
i had it @ IPO. see it dropped, held on to it stupidly not knowing what to do.
DCA it when it hits $1.37 and waited v long. Let go too early at 1.83 :-( Just DCA in the money. No eyes see.
Hi SnOOpy168,
Er.. What is DCA?
We continue to view CMA favorably and see its share price likely benefitting from dual tailwinds ahead:
1) increasing operational traction, as a larger component of CMA’s portfolio becomes operational
and
2) relatively firm retail outlooks in China and Singapore. Maintain BUY with an unchanged fair value estimate of S$2.55.
Source:
OCBC Investment Research - 7 Feb
Today, price dropped after announcement of results, why? Not too bad, though most are reval gain.
Hi Garfield75,
Indeed, fundamentally, CMA's business is still strong. Technically, there is weakness. So, this means a golden opportunity to accumulate shares of a fantastic company cheaper! ;)
CapitaMalls Asia (CMA) has boosted its net profit by 19.7 percent to S$546 million for FY2012, while its earnings stood at S$686.3 million, up 14 percent from FY2011.
Lim Beng Chee, CEO of CMA added: “Our key markets continued to perform well, posting growth in net property income, tenants’ sales on a per square metre basis, and shopper traffic. This was led by China, where net property income grew 16.9 percent and tenants’ sales increased 9.8 percent. The increase in tenants’ sales was spurred by second- and third-tier cities, where it grew even faster – at 13.2 percent.”
CMA has a portfolio of more than 100 retail properties across five countries: Singapore, Malaysia, China, India and Japan.
PropertyGuru, 8 Feb 13.
CMA is targeting to open 2 malls in Singapore by end of this year – Bedok Mall and Westgate, and the spaces have been pre-committed at 65% and 50% respectively.
Another 2 new malls, CapitaMall Tianfu and CapitaMall Meilicheng in Chengdu, will be opened this year, as well as CapitaMall Jinniu Phase II in Chengdu, China and one mall In Mangalore, India.
The management guided that the group had been active in acquisition over the past 2 years and will now focus more on execution of its development projects on hand, although still open to any acquisition opportunities that the mall developer may come across.
Currently its net gearing is still relatively low at around 0.3x and shall trend up to 0.43x by end-FY13 with capex projection of ~S$800mn this year.
Philip Securities, 13 Feb 13.
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