CapitaLand Investment Ltd: Risk Reward Update

Research evidence excerpt

CapitaLand Investment Ltd: Risk Reward Update

UpdateM

RiskRisk RewardReward– CapitaLand- CapitaLandInvestment Ltd Investment(CAPN.SI) Ltd (CAPN.SI)

Undervalued real asset manager - major beneficiary of lower rates

PRICE TARGET S$3.40 OVERWEIGHT THESIS

SoTP valuation (RNAV): We sum up the value of CLI's stake in listed REITs, unlisted funds, ▪We believe lower interest rates will have a

directly held investment properties and our estimated value of its fee business (20x 2026 deeply positive impact on highly interest-

earnings), and deduct capitalized overheads, net debt and minority interest. We then apply a rate-sensitive asset managers such as CLI.

10% discount to RNAV to account for risk of impairments for CLI's S$5bn stake in unlisted ▪As one of the largest listed real estate

funds, where close to two-thirds of fund AUM is comprised of properties in China. investment managers globally, and the

largest owner and manager of Singapore S$3.42

REITs, CLI appears poised to benefit from a

Consensus Price Target Distribution S$3.10 S$4.19 virtuous cycle for REITs. MS PT

the rate cycle turns, its REITs couldSource: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates ▪As

once again raise funds to pursue property

acquisitions, accelerating growth in AUM

and fee income for CLI. Transaction-driven

RISK REWARD CHART fees, asset disposal gains and cheaper

borrowing costs bolster earnings.

is attractive vs. peers and seems SGD S$4.50S$4.50(+77.87%)S$4.50(+77.87%)(+77.87%) ▪Valuation

to overly discount ~30% exposure to

Chinese commercial property, which it is

4 actively reducing.

S$3.40S$3.40(+34.39%)S$3.40(+34.39%)(+34.39%)

Consensus Rating Distribution

S$2.53S$2.53S$2.53 100%Overweight

0% Equal-weight

S$2.25S$2.25(-11.07%)S$2.25(-11.07%)(-11.07%) 0% Underweight