CapitaLand

CapitaLand: Recall yday, CAPL said it will simplify its group structure, which will be realigned from 8 into 4 main business units – Singapore, China, CMA and Ascott. The Singapore and China operations (ex-CMA, Ascott) will be consolidated, allowing the co to fully leverage the integrated multi-sector platform. Apart from strengthening execution and centralizing resources to grow funds under mgt, mgt highlighted its goal of improving its LT ROE through economies of scale, lower cost structure and better efficiencies. Deutsche is positive on mgt's renewed focus on its core Asia markets, emphasis on execution and driving ROE higher. Notes the corporate structure has been streamlined, and a strategic review is underway. Thinks this could result in asset divestments and potential value unlocking which could help narrow discounts to NAV. Deutsche raises RNAV by 6% to $4.85 due largely to the mark-to-market of the listed entities, and tightened target NAV disc from 15% to 10% reflecting the potential for further NAV realization, and supported by the recent re-rating of the Chinese developers. Reiterates Buy with higher TP of $4.36 (up from $3.87), Credit Suisse adds, it recently raised TP for Australand (59% owned by CAPL) from A$3.15 to A$3.35, leading to a higher TP for CAPL from $3.89 to $3.96. The house maintains its Outperform rating, continues to like CAPL, expects earnings momentum to improve in 2013, driven by CMA and better residential profit recognition, with downside risk supported by buybacks.