Capital Land

Cap land has correct from recent high of 415 to yesterday low of 362 . Is the short term correction over ? Watch closely for possible rebounce from current level .

I extract the research report from Kim Eng Securties ;

"Asset allocation into China to increase to 40-45%At the recent launch of the Raffles City brand in Ningbo (formerly known as Capital Plaza), CapitaLand’s management announced its intention to increase the Group’s asset allocation into China to between 40-45% over the next few years, up from 26% in FY08. The Group remains on the lookout for distressed assets in China. RMB25b credit limit put in place To support funding needs for new and existing projects in China, CapitaLand also signed cooperation agreements with Bank of China and Industrial and Commercial Bank of China to obtain a credit limit allocation of up to RMB25b (S$5b) to fund CapitaLand’s various business operations across China. We view this as positive accreditation of CapitaLand’s presence in the Chinese market. Building up landbank in China CapitaLand’s launches in Foshan and Chengdu this year have been well-received, with small ASP increments with subsequent launches. CapitaLand is looking at replenishing its landbank in Shanghai and Beijing. According to the Straits Times, CEO Liew Mun Leong believes that Tianjin and Changsha also present a lot of opportunities. Singapore activities picking up speed CapitaLand had increased its stake in Gillman Heights from 50% to 60% in mid-May, and could possibly launch the new project for sale by 2H09. With construction costs easing, we estimate the breakeven price to be around $753 psf, with an ASP of about $900 psf. CapitaLand may also re-launch Latitude at Jalan Mutiara at an ASP of about $1600 psf.FY10 prospects looking better We view the move to increase its asset allocation into China positively, as CapitaLand already has a 15-year track record in the ever-growing Chinese market. Even sentiments in the Singapore residential property market have improved, suggesting the possibility of more sales in 2H09 and 2010. We reiterate our BUY recommendation, with a target price of $4.24, pegged to a 10% premium to our RNAV of $3.85. "