Company Name: CAPITALAND LIMITED
| Research House: Credit Suisse | Price Call: BUY | Target Price: 3.70 |
Any pullback in Singapore property stocks on the new rules limiting "shoebox" residential units offers a good entry window, Credit Suisse says. It says it expected the measures, but they may have been a surprise to some.
“Although the measures are considered mild, and that some policy overhang has been factored in, given where valuations are (for some developers), we believe property stocks may be impacted by weaker sentiment given the recent strong performance and lower risk appetite amidst market uncertainties.”
It tips CapitaLand as its top pick, estimating it trades at 0.85x P/B and a 35% RNAV discount; it rates it Outperform with $3.70 target. “We expect earnings momentum to improve in 2013 driven by CMA turnaround and better development profits in Singapore and China. Downside risk is also supported by valuations and its share buyback program.” It adds, it likes City Developments for strong execution, delivering strong ROE despite falling gearing; it rates it Outperform with $13.39 target.
CapitaLand is down 0.7% at $3.01; CityDev is down 1.5% at $11.10.
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