Wednesday, February 23, 2011

CapitaLand +0.9%; oversold on recent fears - OCBC

Stock Name: Capitaland
Company Name: CAPITALAND LIMITED
Research House: OCBC

CapitaLand (C31.SG) outperforms today, and is up 0.9% at $3.32, likely reflecting Tuesday’s above-consensus 4Q results which were overshadowed by the broad market selloff, and some bargain hunting after the stock’s weak showing YTD (off 10.1%). 

4Q net profit was $522.1 million, off 41.1% on-year (4Q09 was helped by gains from the CMA listing), but up over three-fold on-quarter. 
OCBC says CapitaLand’s stock has been oversold on recent fears; “CAPL has traded down 8.8% since Feb. 7 and is now at a 52-week low. While recent fears of inflation, political contagion and falling asset prices are valid, we think the market has over-discounted CAPL for these risks.” 
It adds, CapitaLand has balanced, diversified exposure across different geographies and segments; “in addition, it has a solid balance sheet which should buttress it during turbulent times.” 
It adds, current valuation is compelling “and patient investors could gain gradual exposure on signs of price consolidation.” 
The house keeps a Buy rating with a US$4.03 ($5.15) fair value.

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