CMA retail outlook looking up as Chinese economy stabilizes

Chinese malls to put up better numbers.

According to OCBC, latest Chinese economic data-points has mostly been above view, painting a picture of modestly recovering fundamentals.

The research noted that over the last month, the Chinese PMI, trade and inflation figures have mostly beat expectations which increasingly establishes a base case for at least a 7.5% economic growth rate this year – the target set by Chinese authorities.

Further, Chinese industrial production and retail sales reports are expected to further add to signs of recovery.

"We believe these are key positives for CMA and reinforces the longterm outlook of its Chinese mall portfolio, which has continued to put up firm numbers year to date," said OCBC.

"1H13 tenants sales at CMA’s Chinese malls grew at 9.5% YoY on a psf basis; excluding tier 1 cities, tenant sales grew by 11.0% YoY. Long term tailwinds from the secular growth in Chinese retail consumption remain intact, in our view. Maintain BUY with an unchanged fair value estimate of S$2.55," it added.