Monday, July 16, 2012

CapitaMalls Asia - A Buy?

CapitalMalls Asia Limited (CMA) is one of the few shopping mall focused trust which is listed on the Singapore stock exchange. It manages various businesses which includes investment in retail real estate, developing malls, providing service to operate malls, and managing assets of similar companies. It currently manages close to 99 shopping malls spread around 51 cities in various countries like Singapore, Malaysia, China, Japan and India.

Recently it launched a new private equity fund worth US$1 Billion in which CMA would be holding 50% of the stake and remaining stakes held by foreign institutional investors from Asia and Northern America. This fund would invest the money which it generates in the improvement of shopping malls in China. This would increase CapitalMalls Asia Limited (CMA) AUM (Asset under management) to a whopping $21b.

Recently management of CapitalMalls Asia (CMA) has decided that it would hive off its partial stake in various assets worth S$749m. It plans to divest partial stake in CapitaMall Tianfu, CapitaMall Meilicheng, which are in Chengdu and its 66% share in a structured retail or office development in Luwan, Shanghai. Divestment of these assets would fetch a net gain of S$71.8m along with fair value of its retained shares.

CapitalMalls Asia Limited (CMA) with all this positive developments looks an attractive buy at current price with an horizon of 3-6 months. CMA is also expected to finish construction of seven malls in this fiscal which would result in improving its operating performance along with higher profitability.

Another big bang announcement was the appointment of Ho Chee Hwee Simon as Deputy Chief Executive Officer with affect from 1st July, 2012. Ho Chee has a experience of close to 22+ years of experience in real estate and investment. Before becoming the CEO of the company he was the CEO of one of the largest Real Estate Investment trust in Singapore. He has done his Master of Science in Real Estate. Capital Malls Asia Limited (CMA) recently acquired Tiangongyuan in Beijing which has nine malls out of which one is located in Daxing which is expected to be the one of the prime areas which is going to get importance from government for development in coming days.

Amid all the positive developments Capital Malls Asia Limited (CMA) looks to be a great place where money can be invested for short term. People who are looking for a return of 10% on annual basis should definitely invest in this as company has huge prospects and a strong management which is known to take calculated risks. Another bigger advantage which capital malls Asia limited (CMA) has compared to its competitors is the capability which it has to execute its project on timely and efficient manner.

Company is also known for applying cost effective solutions and provide the best in class service along with a business model which lot of other companies strive to replicate. Analysts have rated this stock at current market price is a buy with an price target of $2.06. CMA closed at $1.065 today.

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