That said, Ong has kept her target price of $4.38, based on probability-weighted revalued net asset value (RNAV) and sum of the parts (SOTP), with an 80% probability of demerger.
Ong has kept her earnings forecasts unchanged as well.
To her, CapitaLand remains her top pick for the sector.
“A high proportion of recurring income and its pivot to New Economy assets are expected to keep earnings stable and its portfolio future-ready,” she say
SEE: CapitaLand reports 'continued recovery' for its portfolio in 1Q21 business update
Looking forward, Ong expects CapitaLand’s pursuit of a China renminbi fund management license to be a catalyst for its private fund assets under management (AUM) growth.
RHB analyst Vijay Natarajan has similarly kept his target price unchanged at $4.25.
“Fund management continues to be the key driver, with fee income up 30% y-o-y,” he writes in a May 14 report.
“More granular details on its proposed restructuring are expected to be announced in 3QFY2021, and we believe this will be a key share price catalyst,” he adds. “Valuations are attractive, with the stock trading at a 15% discount to the theoretical implied offer price, and a 33% discount to our RNAV.”
While awaiting further details on CapitaLand’s proposed restructuring, which is likely to be announced in the 3QFY2021, Jaiswal says he expects the group’s final net asset value (NAV) to be higher by 2% to 5%, “on the back of gains from recent transactional activities and revaluation gains”.
Shares in CapitaLand closed 5 cents higher or 1.7% up at $3.57 on May 17, or 0.8 times P/B, according to PhillipCapital’s estimates.
