Capitaland 01 (May 08 - May 10)

[winston]

RESEARCH ALERT-OCBC raises CapitaLand target price

SINGAPORE, Jan 19 (Reuters) - Following is a list of stock price target changes and rating changes.

COMPANY RIC BROKER RATING (PVS) TARGET PRICE (PVS) CapitaLand OCBC Buy (Buy) S$5.30 (S$4.95) BROKER STATEMENT: CapitaLand (CapLand) announced a major transaction that involves the acquisition of 100% share capital of Orient Overseas Developments Limited (OODL) for a cash consideration of US$2.2b (S$3.1b).

OODL owns a portfolio of 7 sites (4 in Shanghai, 2 in Kunshan and 1 in Tianjin). Based on CapLand's valuation of US$2.0b for the assets, its acquisition price represents a 10% premium to its valuation of the assets. Despite the premium paid, we estimate that these projects could still generate an additional S$0.35 per share to our RNAV estimate. CapLand's financial position still remains strong after the acquisition.

While hopes of a bumper special dividend may be gone, we believe that this disappointment can be overcome by the potential profits that these new projects can bring in. Our fair value has now been raised to S$5.30 and we maintain our BUY rating on CapLand.

[winston]

Capitaland up 3%; OOIL up 10% in HK

Who got a better deal or is it a win-win for both parties ?

[winston]

DJ MARKET TALK: Citi Raises CapitaLand To Hold; S$4.48 Target

1008 [Dow Jones] STOCK CALL: Citi upgrades CapitaLand (C31.SG) to Hold from Sell on acquisition of Orient Overseas International's (0316.HK) China property business; "we view the long-awaited acquisition positively; the stock could see improved interest following its major acquisition in China."

Notes acquisition will double CapitaLand's China property portfolio in terms of gross floor area. Estimates deal could add 25 cents to net asset value, raises target price to S$4.48 from S$4.15 to value shares in line with new asset value forecast.

Adds although some caution exists on China property sector due to policy adjustments, sites being bought by CapitaLand are in cities that should be more resilient such as Shanghai.

Source: Dow jones Newswire

[millionairemind]

January 19, 2010, 3.59 pm (Singapore time)

CapitaLand sells another 66 units in Urban Suites

By UMA SHANKARI
CapitaLand's Urban Suites condominium continues to see strong sales, the developer said in an update on Tuesday.

On Jan 6, the company said it has sold 60 apartments in the 165-unit condominium at prices ranging from S$2,400 to S$2,700 per square foot (psf).

And now, another 66 units at the condominium have been sold since then, including from its launch in Indonesia over the last weekend. This brings the total number of units sold to 126, or 90 per cent of the 140 units released for sale to-date.

Compared to the phase one release, prices have increased to S$2,500 to S$2,800 psf, CapitaLand said. The units sold comprise two, three, and four-bedroom apartments and penthouses.

Urban Suites is a high-end project located in the Cairnhill area. Around 70 per cent of the buyers are international homebuyers, from countries including Indonesia, China, Australia and Canada. Indonesians form the majority of the international homebuyers.

[LenaHuat]

Some 15 years ago, Krugman critized Singapore's strategy of throwing expensive capital into the economy without regard for labor productivity. CapLand is doing this right now. By doing so, the mgmt team has avoided wheeling and dealing with the Chinese. If there is a new mgmt team in the wing, then it is none the wiser abt the Chinese.

[iam802]

Is this the article (or one of of the articles) by Krugman ?

The Myth of Asia's Miracle

[kennynah]

there's no myth...just build IRs aka casinos...

[LenaHuat]

Hi iam802
Thanks a million for digging up this masterpiece:-

IT IS A TAUTOLOGY that economic expansion represents the sum of two sources of growth. On one side are increases in "inputs": growth in employment, in the education level of workers, and in the stock of physical capital (machines, buildings, roads, and so on). On the other side are increases in the output per unit of input; such increases may result from better management or better economic policy, but in the long run are primarily due to increases in knowledge.

Knowledge is not just "what is" right now but "what can be" or "what will be". I have problems with CapLand eversince they tie top mgmt's rewards to so-called EVA or Shareholder Value. I always think that it's easy to predict the Chinese markets because one only has to read the lips of their top leaders. Never mind if I was early by some 2 months. Asset bubbles will be pricked because the CCP is every vigilant abt its survival.

[kennynah]

i think so too....their central govt, since the 6/4 affair, have grown to be very vigilant about society unrests... i think they must have acknowledged that their population demographics have changed tremendously in the last 2 decades.... significantly more overseas educated and exposed people... the advent of internet (i dont know any PRC here, including those with seedy jobs, not accustomed to internet technology)...

whilst, in the past, it would have been easier to hookwink a nation of farmers and underprivileged, it is now not likely that their govt actions draw lesser attention by the general populous.

communists they maybe, Deng's greatly successful "open market" policy, swung open the once a very tightly closed door of central politburo...hence putting more pressure to these thinktankers/political leaders to give more concern to their countrymen reactions, in order to garner national support..leading to more popularity policy making...

therefore, i seriously, do not think the CCCP will allow any form of bubble bursting...and the best way, is to prevent any uncontainable bubble from forming ...pricking the already large balloon could be one way of releasing too much air...but i dont believe it will deflate it in any fast and furious fashion...

just my afternon kopi-o spouts of i think, therefore, i say.... 5 cts...

[LenaHuat]

OODL owns a portfolio of 7 sites (4 in Shanghai, 2 in Kunshan and 1 in Tianjin).

The Chinese authorities threaten to penalize developers who hoard land. Will CapLand be securing or raising loans/equity to push ahead with development of these 7 sites? They can't so easily run to the Chinese banks for financing.