1Q13 PATMI up 41% YoY
1Q13 PATMI came in at S$188.2m – up 41% YoY mostly due to heavier income recognition of property developments in Singapore and China and S$46m net gain from the sale of a Beijing project. Excluding one-time items, 1Q13 operating profit is S$133.3m which increased 70% YoY and we judge this to be generally within expectations. 1Q13 topline is S$661.9m; this is up 3% YoY and again mostly in line. We see 1Q13 results and sales updates pointing to firm operating trends across key fundamental drivers – Singapore and Chinese residential sales and the retail mall business – and therefore believe the market would likely react positively to 1Q13 figures.
Pickup in residential sales in Singapore and China
Despite incremental curbs from Chinese authorities in 1Q13, a good 955 residential units were sold in China over the quarter; this is a strong start to the year and significantly higher than the 189 units sold in 1Q12. We see a good chance that CAPL would at least sustain the rate of
~3k units sold in FY12. There was also a stark pickup in Singapore residential sales, given the impact of price incentives, with 544 units sold over 1Q13 versus 681 units sold in the entire FY12.
Strong execution at retail mall segment
CMA’s 1Q13 PATMI increased 10% YoY to S$73.2m. Excluding one-time items, we judge this to be above view due to lower than expected opening costs, increased contributions from new malls and better performances from CMT, ION Orchard and the China Funds. Given the H7N9 bird flu outbreak, shopper traffic for its Chinese malls showed a decrease of 0.9% YoY but note that same-mall tenant sales were up +15.9% YoY. We see a nearer term impact from worsening H7N9 fears to be possible but a sustained long-term business impact, in our view, is unlikely.
Maintain BUY
Maintain BUY with an unchanged fair value estimate of S$4.29 (20% discount to RNAV).
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