3Q22: Glimmers Of Hope In China
CLI reported a strong 3Q22 business update with revenue that was above our expectations. The key highlight of the quarter was the company’s private fund-raising which showed positive momentum ? five new funds were launched with two of them being in China with new high-quality domestic investors, thus diversifying CLI’s capital pool. As expected, its lodging business maintained its solid recovery momentum. Maintain BUY. Target price lowered slightly to S$4.13.
• A better-than-expected quarter. CapitaLand Investment (CLI) reported a better-than-expected performance for 9M22 with revenue up 36% yoy to S$2.3b, accounting for 84% of our full-year forecast. 3Q22 revenue rose 12% yoy to S$687m. Lodging continued to rebound with RevPAU for 9M22 up 41% yoy.
• A bullish tone on the analyst call. While CLI conceded that it remains somewhat hamstrung in its capital recycling efforts in China, due to the inability to have an open transaction market for their assets, it did state that it will be able to meet its S$3b capital-recycling target for 2022. In our view, the key highlights for 3Q22 were updates on CLI’s new funds, three of which are profiled below.