Welcome to the Let the Money Talk podcast.
In this episode, Phillip Securities Research's analyst, Natalie Ong, reports on CapitaLand Investment Limited – Commendable recycling and FUM growth.
1. FY21 PATMI of S$1,349mn was 52% above our forecast due to higher than forecasted performance of JV & Associates and portfolio gains. FY21 DPS of 15 Scts was a positive surprise, exceeding our DPS forecast of 8.3 Scts.
2. Revenue, which comprises real estate investments and fee-related earnings, grew 15.6% YoY to S$2.3bn. FY21 was stellar year of capital recycling. CLI divested a record S$13.6bn in assets at an average 13% premium to book value, driving 10% growth in FUM. Lodging segment recovering steadily - RevPAU rose 19% YoY, as occupancy improved to c.60%, up from c.50% in FY20. Revenue from the lodging segment grew 27%, on the back of recovery in operations and 8.2k keys turning operational.
3. China showing recovery; Singapore stabilizing. The only negative is the 8ppt YoY occupancy decline in India business and logistic parks. Despite this, Indian new economy asset managed to secure positive reversions.
We maintain our ACCUMULATE recommendation, raising our SOTP-TP from S$4.00 to S$4.05 as we raise FY22e investment management PATMI as we bake in faster FUM growth as well as higher EBITDA from the lodging segment. CLI maintains its S$3bn p.a. divestment target while growing FUM by 10% p.a.. At current growth rates, CLI is on track to hitting its 2023 lodging target of 160k keys under management and S$100bn 2024 FUM target.
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