- CapitaLand Investment’s weaker-than-expected 1H23 results, with PATMI declining 19% y-o-y, again underline the problems that China-focused companies have had in the past 6-12 months.
- High interest rates continue to be a burden on deal-making and its capital recycling target will likely be missed. However, we note the steady contribution of its fee-related earnings.
- - Read this at SGinvestors.io -
A weaker-than-expected 1H23...
- CapitaLand Investment (SGX:9CI) reported 1H23 revenue of S$1.35b (-0.7% y-o-y) and PATMI of S$351m (-19% y-o-y), both of which missed our and consensus estimates on a run-rate basis.
- - Read this at SGinvestors.io -
- The key highlight in the result was clearly lodging which saw higher fee-related earnings as well as contributions from new management contracts.
...but CLI should turn the corner soon.
- We note that while CapitaLand Investment is well short of its annual capital recyling target of S$3b, it has achieved S$839m year-to-date (-48% y-o-y) – note that S$800m of this was completed after 30 Jun 23 and thus not captured in the company’s 1H23 results.
- In our view, 1H23 demonstrated the resiliency of CapitaLand Investment’s business as seen by its recurring fund management fees which grew by 10% y-o-y in 1H23 to S$183m, while in 2Q23, its fund management FRE was stable on a q-o-q basis at S$106m.
Ready to deploy capital.
- Read more at SGinvestors.io.
