Thursday, January 20, 2011

CapitaMall - Near term headwinds for CapitaMall units - JPMorgan

Stock Name: CapitaMall
Company Name: CAPITAMALL TRUST
Research House: JP Morgan Chase


CapitaMall Trust (C38U.SG) is down 1.1% at $1.88, in line with the broad market after earlier posting 4Q DPU of 2.36  cents, down 1.4% on year and flat on quarter with net property income at $101.5 million, +5.7% on year, also flat on quarter. 



JPMorgan, which has a Neutral rating and $2.00 target price, says the results were in line, and that outperformance is unlikely with near-term headwinds; “While rental growth is likely to remain positive, DPU growth for 2011 should be flattish as a result of one-off charges from CB redemption. With the stock already trading at 4.9% yield and 1.2x P/B, we believe that CMT is unlikely to outperform the sector.” 

The house adds that the strong EFR pipeline for the sector, especially a number of IPOs in the retail space expected in 1H11, “will likely add pressure on CMT’s share price performance in the near term.” Units unlikely to fall below $1.87 intraday low. 

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