CapitaMalls Asia

Acquisition of 17.1% Interest in Raffles City Changning for $187.2 million

http://info.sgx.com/webcoranncatth.nsf/V...900146AFF/$file/Annc_Changning_Final_20101230.pdf?openelement [SGX Announcement]

(22-12-2010, 04:50 PM)Musicwhiz Wrote: Since CMA is a property developer and not a REIT manager, how would forumers suggest we value the Company? Using NAV, earnings or DCF? It would seem that it is in the same industry and business as companies like Keppel Land, CDL etc which purchase property or land banks and develop them in order to rent.

Appreciate comments on this, thanks!

IMHO, NAV, earnings or DCF are not good ways to value CMA. In fact, it's tough to value, and I entered based on 2 reasons: 1) Technical and 2) It's below IPO price.

Being a property developer entails the the business of enhancing and increasing the NAV.

You buy a land for $X, you build a mall for $Y, you enhance and improve visibility and attractiveness of mall to draw crowds for $Z. The final valuation would and should be greater than $X +$Y +$Z, else they should just get out of business. What this means to me is that they "grow" their NAV over time.

Who to sell to after that? Pick CMT, CRCT or CCT. Job done for CMA, buy another land for $X next. The P/E ratio will then increase accordingly.


In other words, NAV should logically grow over time, while P/E ratio will likely fluctuate rather widely, making DCF valuation tough as well.


The only concern is that CMA isn't dividend friendly, or so it seems.


(Vested)

If you attempt to estimate the value of CMA, I think we can break it down to different business and do sum of all parts:
(1) Property Development - We can value them as developer based on the RNAV.
(2) REIT Management - you can use DCF here
(3) REITS - Mark-to-market quoted investment

(01-01-2011, 04:55 PM)SLC81 Wrote: If you attempt to estimate the value of CMA, I think we can break it down to different business and do sum of all parts:
(1) Property Development - We can value them as developer based on the RNAV.
(2) REIT Management - you can use DCF here
(3) REITS - Mark-to-market quoted investment

How to estimate the RNAV for (1) ? Thanks

I was browsing through youtube last night and I stumbled upon an old CRCT IPO video showcasing some of its malls. CMA owns a stake in the REIT and is also the REIT Manager. Investors may wish to view some of CRCT malls to see its quality - http://www.youtube.com/watch?v=idhWej5n4T8

(Not Vested in any stock in the Capitaland family)

(3) REITS - Mark-to-market quoted investment

Is market price of REITs too volatile to value CMA price...

Market up but CMA down.
Why is this stock such a dead weight?

CMA Singapore Media Interview

CapitaMalls Asia Limited (“CMA”) wishes to announce that in an interview with a few Singapore media today, management mentioned that as CMA had committed about S$2 billion in new projects in 2010, it would likely commit a similar amount in new projects in 2011. CMA also plans to have 100 shopping malls in China, from the current 53 malls, within the next 3 to 5 years.

The future seems to be bright for CMA yet its share price has been sliding all the way !

Quote:How to estimate the RNAV for (1) ? Thanks

RNAV -> Revalued NAV , sometime Revised NAV or Reinstated NAV.

http://en.wikipedia.org/wiki/Revaluation...xed_assets

For Property company, we usually use the tern Revalued NAV.

The fair/acceptable way to determine the RNAV is to use an independent valuer to carry out the valuation on the year basis, i have seen this done quite well with UOL through timely release to SGX.

The development potential of the land bank normally is taken into account in determining RNAV. I have seen some Analysts in their research reports put in valuation based on assumption such as: "Company has AAA square feet of land to be redeveloped into BBB units or square feet GFA , Development charges will be CCC, current market transaction of DDD /unit or square foot, the potential profit from such project will by EEE or $ FFF earning per share.

(04-01-2011, 09:04 PM)SLC81 Wrote:

Quote:How to estimate the RNAV for (1) ? Thanks

RNAV -> Revalued NAV , sometime Revised NAV or Reinstated NAV.

http://en.wikipedia.org/wiki/Revaluation...xed_assets

For Property company, we usually use the tern Revalued NAV.

The fair/acceptable way to determine the RNAV is to use an independent valuer to carry out the valuation on the year basis, i have seen this done quite well with UOL through timely release to SGX.

The development potential of the land bank normally is taken into account in determining RNAV. I have seen some Analysts in their research reports put in valuation based on assumption such as: "Company has AAA square feet of land to be redeveloped into BBB units or square feet GFA , Development charges will be CCC, current market transaction of DDD /unit or square foot, the potential profit from such project will by EEE or $ FFF earning per share.

So we have to use the research analyst figures to determine CMA's RNAV ?