Your 60-Second Analysis of CapitaLand Limited (SGX: C31) Shares
Sudhan Pâ—Ź
In this series, we will feature one Singapore-listed company each time as a quick guide to everything you should know about it in 60 seconds.
Right here, we have CapitaLand Limited (SGX: C31). Previously, we featured Yangzijiang Shipbuilding Holdings Ltd (SGX: BS6), one of the world’s largest shipbuilders.
What’s CapitaLand’s Business About?Â
CapitaLand is the largest real estate company that’s part of the Straits Times Index, and it’s also one of the biggest in Asia.
CapitaLand is also the sponsor of several real estate investment trusts (REITs) listed in Singapore, including Ascendas Real Estate Investment Trust (SGX: A17U), CapitaLand Mall Trust (SGX: C38U), and CapitaLand Commercial Trust (SGX: C61U).
CapitaLand’s Financial HighlightsÂ
The following table shows how CapitaLand’s revenue, net profit, net asset value, and return on equity have grown over the years:
| 2014 | 2015 | 2016 | 2017 | 2018 | |
|---|---|---|---|---|---|
| Revenue (S$' million) | 3,924.6 | 4,761.9 | 5,252.3 | 4,618.2 | 5,602.4 |
| Net profit (S$' million) | 1,160.8 | 1,065.7 | 1,190.3 | 1,569.6 | 1,762.5 |
| Net asset value per share (S$) | 3.94 | 4.21 | 4.15 | 4.34 | 4.55 |
| Return on equity (%) | 7.1 | 6.1 | 6.6 | 8.6 | 9.3 |
The property giant’s return on equity (ROE) has climbed from 7.1% in 2014 to 9.3% in 2018, which is a nice trend to see. ROE reveals management’s ability to grow shareholders’ capital. Looking ahead, CapitaLand wants to achieve double-digit ROE with fee income growth, capital deployment, and cost optimisation.
CapitaLand’s net-debt-to-equity ratio, which shows how much leverage the company has taken, stood at 0.69x at end-September 2019. CapitaLand plans to bring the ratio down to 0.64x by 2020.
CapitaLand’s Dividend History
CapitaLand has rewarded shareholders well over the years. Dividend at the company has increased by 33% in all from 2014 to 2018.
| 2014 | 2015 | 2016 | 2017 | 2018 | |
|---|---|---|---|---|---|
| Dividend per share (Singapore cents) | 9.0 | 9.0 | 10.0 | 12.0 | 12.0 |
Major Risk for CapitaLand to Take Note Of
The main risk for CapitaLand is an economic slowdown in Singapore and China.
As of 30 September 2019, Singapore contributed to 42% of CapitaLand’s total assets while China took up 37% of the pie.
Therefore, any adverse changes to the economic climate in the two countries could have a significant impact on CapitaLand’s business.
CapitaLand’s Share Price and Valuation
Over the past five years, CapitaLand’s share price has increased by around 21%.
At CapitaLand’s share price of S$3.92, it has a price-to-book (PB) ratio of 0.9 and a dividend yield of 3.1%.
Want to Discuss Further?
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Disclaimer: The information provided by Seedly serves as an educational piece and is not intended to be personalised investment advice. ​Readers should always do their own due diligence and consider their financial goals before investing in any stock.Â
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