CapitaLand set to post higher second-half earnings

Led by two Singapore projects.

Residential launches in Bishan 2 and Marine Point, as well as a few thousand other homes to come to market during the second half of 2013 will help propel profitability for the period, said DBS Vickers.

Here's more from DBS Vickers:

Targeting 8-12% long term ROE. Post the result, we expect 2H earnings to be better sequentially. Another key takeaway was the result of the strategic review its non-core investments. The group aspires to be a growth company underpinned by steady recurrent earnings, derived from 1/3 development and 2/3 ready assets and would focus on integrated projects in its core markets in Spore and China as part of strategy to deliver a target ROE of 8-12%. We see this as also a platform to generate a sustainable dividend level. On Australand, the company now becomes a key investment rather than a financial investment as earlier mentioned. We do not see this latest outcome as a major deviation from its long term growth strategies and expects the group to potentially reach these targets in the longer term. Balance sheet remains healthy with 0.45x gearing and gross cash hoard of S$5.2b.

More residential launches. The group plans to offer 2 projects in Spore in 2H – Bishan 2, targeting at a different segment than Sky Habitat as well as Marine Point while landed homes at Coronation Rd are likely to come onto the market in 2Q14. In China, it would recognize billings from another 1,900 homes. To extend earnings visibility, the planned launch of 1,400 units is scheduled to augment sales of 1,691 units in 1H. Danga Bay development in Msia would likely be marketed in 2014. CMA and Ascott could continue to focus on expanding income and portfolio through AEIs and newbuilds.