CapitaLand unveils pipeline of 34,000 units across China

Things are really getting better.

According to Maybank Kim Eng, it likes CapitaLand’s diversified model, which gives it exposure to various markets and across asset classes. For 2013, the firm expects the retail mall business to continue to drive growth, while the China residential business also looks to build on the stronger sales momentum enjoyed in 2012.

Mr Lim Ming Yan has effectively taken over the helm as President and Group CEO and he has announced plans to reorganize the Group into four main areas, namely CapitaLand Singapore, CapitaLand China, CMA and The Ascott Limited.

While CMA and Ascott will maintain their global footprints, thorough reviews will be conducted for the other geographical markets and businesses with a view of exiting those deemed not scalable or if it unlocks value for shareholders.

The largest business under review will be Australand, where management sees its investment as a purely financial one.

Here's more from Maybank Kim Eng:

We expect the retail mall business under CapitaMalls Asia (CMA SP) to grow from strength to strength as China progresses towards being a consumption-led economy.

Even though it already has 59 malls in China, we believe CMA is still actively on the lookout for more acquisition opportunities. In the near term, we expect capital recycling opportunities possibly from the divestment of its 50% stake in ION Orchard, as well as Queensbay Mall in Penang.

Following a year of improved home sales in China in 2012, CapitaLand has a pipeline of another 34,000 units across China and we think demand will continue to be underpinned by the urbanization process over the medium to long term.

Under the new leadership, we expect China to remain a very important market for the Group. We have a target price to SGD4.27 pegged at a 20% discount to RNAV. Positive newsflows on take-up rates of its residential projects in Singapore and China will serve as positive catalysts.

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