FY 2010 Annual performance of CapitaLand and City Developments

Annual performance of CapitaLand is compared against City Developments’ in this post.

CapitaLand

Net Profit attributable to shareholders, $1.27 billion (20.9% increase)
ROE   9.2%
EPS     29.9 cents
Total cash dividend per share, 6.0 cents (20% of EPS)
Dividend yield 1.83% (based on 24 Feb share price of $3.27)
Net Asset Value per share $3.33
Price to Earnings ratio 10.94 times
Price to Book ratio 0.98 times
Net Debt to equity 0.18 times
Cash $7.2 billion

City Developments

Net Profit attributable to shareholders, $ 749 million (26% increase)
ROE   9.23%
EPS      80.9 cents
Total cash dividend per share,  18 cents (22% of EPS)
Dividend yield 1.65% (based on 24 Feb share price of $10.92)
Net Asset Value per share $7.03
Price to Earnings ratio   13.50 times
Price to Book ratio 1.55
Net Gearing 29%
Cash position $1.9 billion

CapitaLand’s Return on Equity (ROE) was comparable with City Developments (9.2% vs 9.23%). Only 20% of earnings per share (EPS) was proposed as dividend in the case of CapitaLand, while City Developments proposed 22% of EPS as dividend. Dividend yield based on current share price is higher for CapitaLand (1.83% vs 1.65%)

Price to Net Asset Value per share is lower for CapitaLand at 0.98 times against 1.55 times for City Developments. It appeared that share price of CapitaLand was undervalued.

CapitaLand had cash position of $7.2 billion, which was huge compared to $1.9 billion for City Developments. With that kind of money, CapitaLand outbid the other 18 bidders for a Bishan land parcel (near to Junction 8 and MRT). Bid from CapitaLand was $550 million, which was way above the second highest bid from Keppel Land of $432 million. One wonders whether the bid gap between the first bid and second bid can be narrower. Incidentally, City Developments put in a $418 million bid (fourth highest).

Copyright © 2011, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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