CapitaLand Investment - DBS Research 2024-08-15: Dancing In The Rain

• CapitaLand Investment (SGX:9CI)'s 1H24 profit after tax of S$331mil was only 40% of our full year estimates of S$736mil, mainly due to lower portfolio gains of S$35mil in 1H24 vs our assumptions of S$150mil for the year.
• - Read this at SGinvestors.io -

1H24 results slightly below expectations.

• Revenues were flattish, up 1% y-o-y to S$ 1,365mil, with a noticeable 8% y-o-y rise in revenues from Fee related Business (FRB) to S$ 561mil. This drove EBITDA up by a similar 8% y-o-y to S$819mil, fuelled by portfolio gains of S$69mil from divestment activities across its listed/private fund platforms and higher fair-value gains from its stakes in its listed REITs from recent issued units.

Notable switch to a fee-related earnings model.

• We note a gradual switch in contribution in operating PATMI towards the group’s FRB, which provides a recurring fee income outlook.

Capital Management.

• - Read this at SGinvestors.io -
• Given the expected dovish interest rate environment 2H24-2025 onwards, we believe that interest rates may have already peaked.

Outlook & Our Views

Seeking diversification through repositioning its capital, recycling assets.

• Read more at SGinvestors.io.

Derek TAN DBS Group Research | Tabitha FOO DBS Research | https://www.dbs.com/insightsdirect/ 2024-08-15 SGinvestors.io

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