CGS-CIMB analyst Lock Mun Yee has reiterated their bullish stance on 9CI stock, giving a Buy rating today.
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Lock Mun Yee has given his Buy rating due to a combination of factors including CapitaLand Investment Limited’s (CLI) strong fee-related revenue growth and strategic investment plans. Despite a year-over-year decline in overall revenue, the company demonstrated resilience with a notable 18% increase in fee-related revenue, driven by robust performance in listed and private funds management, as well as lodging management. This growth underscores CLI’s effective management and strategic focus on high-potential sectors like logistics, self-storage, and data centers.
Additionally, CLI’s asset-light fund management model and strong recurring fee-income base provide solid income visibility and potential for future growth. The company’s ability to raise significant funds and its strategic initiatives to scale up its funds under management (FUM) further support the positive outlook. Potential catalysts for re-rating include accelerated growth in FUM and a faster-than-expected reduction in balance sheet size, which could enhance return on equity. However, risks such as a challenging real estate market and prolonged high interest rates could pose challenges to CLI’s investment returns.
Mun Yee covers the Real Estate sector, focusing on stocks such as CapitaLand Investment Limited, ESR-REIT, and Frasers Centrepoint. According to TipRanks, Mun Yee has an average return of 6.4% and a 56.49% success rate on recommended stocks.
In another report released today, DBS also maintained a Buy rating on the stock with a S$3.65 price target.