MENU

What Investors Should Know About CapitaLand Retail China Trust’s Latest Earnings and Valuation

CapitaLand Retail China Trust (SGX: AU8U) is a REIT that invests in retail malls in China. It currently has 11 properties in its portfolio.

There are two things to know about the REIT right now: Its latest financial performance and valuation.

Financial performance

Here is a table showing important items from CapitaLand Retail China Trust’s income statement for 2018’s first quarter:


Source: CapitaLand Retail China Trust earnings presentation

We ca see that CapitaLand Retail China Trust had experienced a mixed quarter. Its revenue and net property income fell, but its distribution per unit (DPU) had increased slightly. The REIT attributed its lower top line and net property income to the sale of CapitaMall Anzhen in July 2017, and lower revenue from CapitaMall Grand Canyon.

As of 31 March 2018, the retail REIT clocked in a healthy gearing ratio of 32.5% (which is well below the regulatory limit of 45%), and its occupancy rate is also at an acceptable level of 94.9%.

Valuation

There are two useful valuation metrics for assessing REITs. They are the price-to-book (PB) ratio, and the distribution yield.

The table below shows CapitaLand Retail China Trust’s PB ratio and distribution yield. It also shows the respective averages for the two valuation metrics for the 42 REITs that are in Singapore’s stock market.


Source: SGX Stock Facts

We can see that CapitaLand Retail China Trust’s valuation is essentially on par with the market average.

Meanwhile, there are 28 surprising and important things we think every Singaporean investor should know—and we’ve laid them all out in The Motley Fool Singapore’s new e-book. Packed with information and insights, we believe this book will help you be a better, smarter investor. You can download the full e-book FREE of charge—simply click here now to claim your copy.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned. The Motley Fool Singapore has recommendation on CapitaLand Retail China Trust.