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CapitaMalls Asia: Net profit up 42.6%.

Friday, February 10, 2012

In July last year, I put in a buy order for shares of CapitaMalls Asia because I felt its numbers showed it to be doing well but buying when its price was still firmly in a downtrend proved to be a mistake.

More than half a year later, fundamentally, things are still looking strong while technically, the downtrend has been broken, presenting a more promising picture.

I would be rather surprised if the low of $1.12 would be tested again. Why? Breaking out of the top of a base formation, it is more likely that we would see some support at $1.38 or so in the event of a pull back. Technically, we want to buy on retracements in an uptrend. Buying at supports could prove rewarding.


Some numbers:

Gearing level: 3.9%
NTA per share grew to $1.60
Final dividend of 1.5c per share proposed.

See slides presentation: here.

With more than 50 per cent of its China malls expected to be operational this year, the mall developer said 2012 will be "an inflection point".  Source: CNA. Read article: here.

Related post:
CapitaMalls Asia: Interim dividend declared.

Saizen REIT: 1H FY2012 DPU of 0.61c.

The strong JPY is a boon for Saizen REIT unitholders as it lifted distributable income in S$ terms as well as the NAV per unit.



A DPU of 0.61c has been declared for 1H FY2012 and is payable on 6 March 2012. At a unit price of 15c, this represents an annualised distribution yield of 8.1% which is not bad at all.

NAV per unit stands at 35c.

I continue to like the fact that Saizen REIT owns freehold residential properties in a country which sees a majority of its population renting the homes they stay in.

A continuing decline in rental reversions although small hints at a weak housing market and keeping the status quo, the only way DPU could grow is through cost cutting and a continuing appreciation of the JPY.

However, the management is unlikely to keep the status quo and Saizen REIT could potentially increase DPU through acquisitions using debt and internal resources. With a stronger balance sheet, it is capable of this.

Of course, we have to remember that, as of 31 December 2011, there were still 17 warrants yet to be exercised for every 100 units in issue. Once all the warrants are exercised, we have to expect a proportional drop in DPU, everything else remaining equal.

As of 31 December 2011, gearing stands at 31.33% taking into consideration cash on hand. Against the value of its investment properties alone, gearing would be 37.64%. With more warrants yet to be exercised, Saizen REIT could keep gearing level low and have the internal resources to fund a few more acquistions.

See announcement: here.

Related post:
Saizen REIT: Acquisitions and long term loans.


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