CGS-CIMB analyst Lock Mun Yee has kept ‘add’ on CapitaLand with an unchanged target price of $4.04 after the group divested part of its stakes in six Raffles City developments in China on June 28.
The agreed portfolio value of RMB46.7 billion ($9.6 billion) is at a 6.7% premium to valuation, notes Lock.
See: CapitaLand divests partial stakes in six Raffles City developments in China in $9.6 bil deal
In terms of impact, CapitaLand expects to realise net proceeds of over $2 billion from the sale.
Its net tangible assets (NTA) for the FY2020 book is expected to increase by 1.4% to $4.15, according to management.
The transaction brings the total capital recycled across the group to $11.2 billion year-to-date (y-t-d), three times higher than its annual target of $3 billion.
To Lock, the potential divestment gains should also bolster CapitaLand’s bottomline for the FY2021.
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On this, Lock has left its earnings per share (EPS) estimates for the FY2021 to FY2023 unchanged.
Details of its proposed corporate restructuring exercise are expected to be released in the 3QFY2021.
CapitaLand, on July 1, sold two Tokyo malls for over 42 billion yen ($520 million).
See also: CapitaLand sells two Tokyo malls for $520 mil, to invest $91 mil in Osaka logistics facility
As at 1.19pm, shares in CapitaLand are trading 1 cent lower or 0.3% down at $3.70 or 0.82 times P/BV, according to CGS-CIMB’s estimates.
Photo: CapitaLand
