3Q12 RESULTS ABOVE VIEW
• 3Q12 results beat expectations
• China and SG retail outlook still firm
• Raise FV estimate to S$2.16
Operational traction driving earnings surprise
CMA reported 3Q12 PATMI of S$62.4m – up 70.8% YoY mostly due to
Minhang and Hongkou contributions and increased management fees.
No one-time gains were booked during the quarter, and we judge this
set of results to be above consensus and our expectations. 9M12 core
PATMI, excluding extraordinary items, now make up 83% of our FY12
forecast, driven by faster than expected revenue growth at Minhang
and Hongkou, and a S$7.3m QoQ dip in admin expenses as mall-
opening costs eased. 3Q12 topline came in at S$102.1m – similarly
up 52.6% YoY and above expectations.
9M12 Chinese tenant sales up 10.7% YoY
Retail conditions in China remained at healthy levels over 3Q12
though we note signs of mild deceleration in growth. CMA reported
that 9M12 shopper traffic and tenant sales were up 8.4% and 10.7%
YoY respectively and that, excluding Tier 1 cities, tenant sales were up
14.2%. 9M12 same-store NPI in China was up 18.4% YoY. 9M12
shopper traffic in Singapore was down 0.8% YoY, continuing a similar
trend seen earlier this year.
Key projects on schedule
Key projects were kept on schedule, with Star Vista opening in Sep
2012 (~90% of NLA committed) and the Bugis+ AEI completing in Jul
12 as planned. CMA also opened six new malls over 3Q12: CapitaMall
Taiyanggong (Beijing), CapitaMall Rizhao (Rizao), CapitaMall Wusheng
(Wuhan), CapitaMall Xuefu (Harbin), Raffles City Ningbo (Ningbo) and
Raffles City Chengdu (Chengdu). This tracked closely to our
expectations.
Maintain BUY with higher S$2.16 fair value
We expect increased visibility of recurring earnings, as a larger
component of CMA’s portfolio becomes operational, and relatively firm
retail outlooks in China and Singapore to be positive drivers of its
share price ahead. Maintain BUY with an increased fair value estimate
of S$2.16 from S$1.85 previously as we update for valuations of REIT
holdings and reduce the RNAV discount to par (from 10% previously).
