CMT – DBSV

Change in CEO but no change in strategy

Changes at the top. CapitaMall Trust (CMT) announced that Mr Ho Chee Hwee Simon has resigned as Chief Executive Officer (CEO) of the company and will be succeeded by Mr Tan Wee Yan, Wilson, who is currently the Deputy CEO of CMT with effect from 1 July 2012. Wilson Tan joined CMT from CMA where he was SVP in the CEO’s office for the Singapore market in Feb this year and prior to this he was the Group CEO of Singapore Post Limited.

Not unexpected, strategy intact. We believe that these changes are somewhat expected and we do not expect any major change in strategy, business model and operations at CMT. Meanwhile, Mr Simon Ho has assumed a new role as the Deputy CEO of CapitaMall Asia (CMA) and will remain a director and a member of the Investment Committee of CMT. Hence, we think the long-term strategies remain intact with stronger synergies in place.

Maintain BUY. We believe the changes should not have any impact on stock prices and we continue to like CMT for its strong execution ability. While the reit has delivered relatively modest growth in its results in the last few quarters, we believe that should change. We see a stronger performance in 2H, supported by the full contribution of JCube as well as the gradual completion of the AEI works at Clarke Quay, Bugis+ and The Atrium by 2012-2013. In the longer term, the completion of the retail portion of Westgate in 2013 should underpin medium term earnings growth. Maintain BUY at an unchanged TP of S$2.05.