Is CapitaLand’s 12% stock upside potential justified?

The property group’s share price is already up 14% so far this year, but analysts believe there is more room for the stock to grow.

  • CapitaLand Ltd (SGX: C31) rallied to S$3.75 on Wednesday (07 July 2021)
  • The property group launched its second S$400 million logistics private fund in India
  • The fund is part of the group’s plans to expand its logistics portfolio in India over the next four years
  • Analysts foresee a 12% upside potential on the stock in the next 12 months
  • Interested to go long or short on CapitaLand shares without having to put up the full cost? Contracts for Differences (CFDs) allow you to do that. Open an account with us to get started today.

CapitaLand stock price: What’s the latest?

CapitaLand shares rose slightly after announcing its second logistics private fund in India on Wednesday.

The property group launched a new S$400 million fund aimed at expanding its presence in India’s logistics sector, which is forecasted to expand at a compound annual growth rate of 10.5% between 2019 and 2025.

The CapitaLand India Logistics Fund II will invest in the development of logistics assets in key warehousing and manufacturing hubs in six major cities across the country - Ahmedabad, Bangalore, Chennai, Mumbai, National Capital Region (NCR), and Pune, as well as in emerging markets such as Coimbatore, Guwahati, Jaipur, Kolkata and Lucknow.

The fund will grow CapitaLand’s current total Funds Under Management (FUM) of S$79.2 billion across over 20 private funds and six listed trusts.

Mr Jonathan Yap, President, CapitaLand Financial, CapitaLand Group, who oversees CapitaLand’s business in India, said the group sees ‘significant opportunities’ in India’s logistics sector, which has continued to thrive despite the pandemic.

In total, the group is targeting to ‘develop a logistics portfolio of 20 to 25 million sq ft of space in India by 2025’, he added.

CapitaLand’s first logistics private fund, the S$400 million Ascendas India Logistics Programme, was launched in 2018.

How do analysts view the stock?

The blue-chip counter is up 14% year to date. The latest analyst sentiments published by SGX StockFacts show a consensus rating slightly higher than ‘outperform’ and price target of S$4.20 on the stock.

The price target represents a 12.3% upside potential from CapitaLand’s last traded price of S$3.74 as at 14:50 SGT on Wednesday.

The latest investment thesis came from CIMB analysts on 10 June. They reiterated an ‘add’ rating and target price of S$4.04, naming it among their preferred picks for the property sector.

The analysts stated that they retain a bullish view on the sector, as developers’ valuations ‘still look inexpensive’, currently trading at a 45% discount to RNAV, close to one standard deviation below long-term mean discount.

‘We prefer developers with a high recurring cash flow base and strong balance sheets that would enable them to tap into any opportunities during this slower cycle,’ they wrote in a client note.

Downside risks, however, include faster-than-expected rate hikes, and a weaker-than-expected macroeconomic outlook, which ‘could dampen the demand for big-ticket items such as housing’.

How to trade CapitaLand shares with CFDs

Trading Contracts for Difference (CFDs) is a way of speculating on financial markets that doesn’t require the buying and selling of any underlying assets.

The first step towards trading CFDs is to learn how they work. There are a number of differences between CFDs and other forms of trading, and understanding these nuances can help you trade more effectively.

To get started, you can take a free online course through IG Academy or read our one-page introduction: what is CFD trading and how does it work?

If you are ready to trade, open a live or demo account with us to gain access to thousands of assets immediately.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.