Stock Investment Singapore : This Property Giant Could Be The Blue-Chip Stock You Need

Friday, 2 December 2016

This Property Giant Could Be The Blue-Chip Stock You Need

News Of The Day, With Blue-Chip Stock :

SINGAPORE (Dec 2):

CapitaLand’s effort to boost its recurring earnings and cash flow is paying off, and its shares look attractive. Is this the blue-chip property stock to own?

What is likely to draw investors is the progress CapitaLand is making in its plan to accelerate cash generation from its assets in China and Singapore, and boost its return on equity (ROE).

More than anything else, that could widen the distance between itself and its peers, and turn it into the preeminent play on Asian real estate.

CapitaLand has an equity base of $24 billion, which is already significantly higher than Global Logistic Properties at US$13.4 billion and City Developments at $11.1 billion.

Meanwhile in Vietnam, CapitaLand is building a presence that is similar to what it has in China as well as Singapore.

It has deftly used a stable of property funds and trusts to finance and hold its development projects, and companies specializing in different fields to manage different types of commercial properties.

Derrick Heng, an analyst at Maybank Kim Eng Research, says CapitaLand’s earnings for the nine months to Sept 30 met 79% of his full-year estimate.

According to him, the group has unbilled home sales in China of RMB14.8 billion. “Recognition of 40% of these in 4QFY2016 provides sales visibility of $1.1 billion,” Heng says in a recent report.