CapitaLandInvest rose the most in five months after the Singapore real estate investment manager’s annual profit more than doubled and it signaled optimism that losses from China will ease.

While the increase in net income missed estimates amid headwinds from its exposure to China, gains from areas including private funds drove revenue higher. The shares climbed as much as 4% in Singapore on Thursday morning, the biggest intraday advance since September.

Net income rose to S$479 million ($358 million) last year from S$181 million a year earlier, the company said in a statement. That missed the S$720.3 million average of 11 analyst estimates compiled by Bloomberg.

The company, which is backed by Singapore state investor Temasek Holdings Pte, has had a rocky transition since a major restructuring in 2021, when it was hived off from a development arm that is now privatized. Its exposure to China — where a property slump persists — remains a drag despite a professed desire to reduce the proportion of its investments there over time.

Revenue was S$2.82 billion, versus a consensus forecast of S$2.88 billion and the previous year’s S$2.78 billion. The firm saw revenue increases in all major business segments including private funds management and listed funds management. But it booked revaluation losses totaling S$261 million “primarily driven by China due to challenging market conditions affecting rental rates and occupancies.”

Valuations in China may be nearing a bottom for the company, Chief Financial Officer Paul Tham said at a briefing.

“I am confident that we will be able to recycle more of our China assets and drive asset-light growth of our fund business in China by developing attractive products for both domestic and international investors,” Chief Executive Officer Lee Chee Koon said in a statement. He said the firm will seek to pursue investments in undervalued assets as well as seed new funds and real estate investment trusts.

China Exposure

CapitaLand Investment’s funds under management stood at S$117 billion as of Dec. 31, up from S$99 billion a year earlier, with 26% in China. The manager said late last year that it wants to reduce its exposure in the world’s second-largest economy to 10-20% of its expected S$200 billion in funds under management by 2028. It adjusted that target to 15-20% in a presentation on Thursday. China also remained the second-largest slice of its S$136 billion assets under management at the end of last year, trailing only Southeast Asia, at 35%.

Shares of the firm fell to a record low earlier this month and are down almost 2% this year despite Thursday’s gain. Since hitting a peak in 2022, the company has lost about S$9 billion in market value.

The manager made a spate of acquisitions to beef up its investments outside of troubled real estate markets last year, including SC Capital Partners Group, a Japan-focused property investor. It also announced plans to buy the property and corporate credit investment management business of Australia’s Wingate Group Holdings.

Its shares have seen major institutional outflows. Such investors were net sellers of about S$105 million of the stock in January, the second-most for the month for most actively traded stocks, Singapore exchange data show. Temasek is the firm’s largest shareholder, owning more than 50% of outstanding shares.

CapitaLand Investment said it will propose a dividend of about S$0.18 per share for 2024, subject to shareholders’ approval, and will seek to increase its annual dividend to a minimum of half of its net profit in cash, which it says reflects confidence in delivering “strong cashflow and even better performance going forward.”