MARKET PULSE: CMA (10 Sep 2013)

Stock Name: CapMallsAsia
Company Name: CAPITAMALLS ASIA LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.55

MARKET PULSE: CMA

10 Sep 2013

KEY IDEA CapitaMalls Asia: Stabilizing fundamentals in China Latest Chinese economic data-points has mostly been above view, painting a picture of modestly recovering fundamentals. Over the last month, the Chinese PMI, trade and inflation figures have mostly beat expectations which increasingly establishes a base case for at least a 7.5% economic growth rate this year - the target set by Chinese authorities. We look forward to Chinese industrial production and retail sales reports today, which are expected to further add to signs of recovery. We believe these are key positives for CMA and reinforces the long-term outlook of its Chinese mall portfolio, which has continued to put up firm numbers year to date. 1H13 tenants sales at CMA's Chinese malls grew at 9.5% YoY on a psf basis; excluding tier 1 cities, tenant sales grew by 11.0% YoY. Long term tailwinds from the secular growth in Chinese retail consumption remain intact, in our view. Maintain BUY with an unchanged fair value estimate of S$2.55. (Eli Lee)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - US stocks climbed on Mon, with the S&P 500 extending its longest win streak since Jul, after Chinese exports beat projections and as investors anticipated the unveiling of Apple's new iPhone models. - Tiger Airways Holdings has upped its shareholding in the capital of Indonesia's PT Mandala Airlines from 33% to 35.8%. - Amara Holdings may sell hospitality assets as a real estate investment trust. - Neo Group yesterday posted a net profit of S$2.77m for the six months ended 31 Jul 2013, almost four times the net profit of S$703,000 a year ago. - XMH Holdings share price rose 2 cents, or 4.9%, to 43 cents yesterday after the diesel engine provider announced an acquisition over the weekend. - A-Sonic Aerospace's stock took off on high volumes yesterday, following the logistics and aerospace company's revelation last week that it has started up an aircraft-leasing division. - Synear Food Holdings' independent shareholders have adhered to the recommendation of an independent financial adviser that shareholders approve a delisting plan.