What Happened
CapLand has announced that Mr Liew Mun Leong will be stepping down as group president and CEO on 28 Jun 2013. Mr Liew will be retiring rather than resigning after 17 years with the group, which included two contract extensions. The board has appointed a headhunter to source for a new CEO both internally and externally, who will be named in a few months. Mr Liew has yet to be asked to remain on the CapLand board and is keeping his options open.
What We Think
Mr Liew noted during the analyst briefing that there are “more than one or two” chiefs and senior management who are
capable of replacing him. While the board is likely to have the final say, we believe Mr Liew’s input will carry significant weight. Mr Liew’s tone suggests a preference for a new CEO from within the group given the success of the group. This, in our view, will be the ideal outcome. Mr Liew stressed that his successor should be 1) a real estate person who also understands finance, and 2) someone who understands China and Singapore and has an international mindset. In that regard, we see Mr Lim Ming Yan (COO), Mr Oliver Lim (CIO) and Mr Arthur Lang (CFO) as probable candidates, in that order. The bulk of CapLand’s core management team remains intact. While a new CEO could mark a change in style, we expect the essence of the group’s much entrenched capital recycling model (with a focus on China) to prevail regardless of who is at the helm.
What You Should Do
Capland remains a key pick in the sector. We believe there is enough depth in CapLand’s management team to ensure a smooth transition and do not see this as a negative event. Any undue share price weakness is an opportunity to accumulate.
No comments:
Post a Comment