Balance sheet has strengthened with net debt-to-equity ratio dipping to 0.39x. In a Thursday report, analyst Lock Mun Yee says this puts the group in a strong position to further deploy capital into its core markets of Singapore and China as well as into Japan and Vietnam.
To recap, CapitaLand reported 2Q17 PATMI of $579.3 million, up 97% y-o-y. This was due to better operating performance, higher revaluation gains from investment properties in Singapore and China as well as greater divestment gains.
See: CapitaLand 2Q earnings double to $579.3 mil on better operating performance
Operating PATMI grew 21% y-o-y to $207 million due to higher China development profits and contributions from newly acquired properties in China and the US. 1H17 core PATMI of $545 million formed 59% of CIMB’s full-year forecast.
During the quarter, the group generated $281 million residential sales in Singapore. Ninety-five percent of its launched projects have now been taken up, including 59% of Victoria Park Villas.
The remaining Singapore residential inventory makes up a small 2% of CapitaLand’s total assets. As such, management indicated it would continue to maintain a “disciplined” strategy towards restocking its residential pipeline. That said, Singapore makes up a sizeable 35% of its asset base, with greater exposure to the commercial and retail property segments.
In China, over 1,088 residential units worth RMB3.1 billion were handed over. With an additional RMB4.6 billion or 3,084 units of new sales, the group has RM11.7 billion of locked-in sales to be recognised over 2H17 and FY18. It plans to launch another 3,044 units for sale in 2H17.
As at 12.51opm, shares in CapitaLand are up 10 cents at $3.84.
