City Developments 01 (May 09 - Oct 16)

[iam802]

...The Kweks are know to dislike scholars, bookworms who cannot stand the test of the market.

..

This alone is worth 3 cheers.

[Aspellian]

Hi Aspellian
CDL is superior to CapLand. CapLand is pretty crap. Why?
(1)The management is paid bonus on the concept of EVA, which IMHO is a silly idea of rewarding management. The cost of capital, especially the cost of debt, is so low. So without lifting a finger, the default formula will reward the management because it would have deemed to create EVA.
(2) When they bought Chinese land from HK's Ex-Chief Executive Tung, I commented that it was a lazy way of doing business in China. There is no knowledge transfer. The management team is not learning about wheeling-and-dealing in the pretty complicated Chinese real estate market. Bidding for land is very tricky in China.
(3) During the global financial crisis, its capital structure was weak and proven unreliable as it had to desperately order a rights issue to raise capital.
(4) The team is gone except for Liew. I have seen Liew in action at AGM. You can read about my opinion from my earlier posts.
(5) Look at its exorbitant bids for land (partly hived off to CapitaMallAsia) in Jurong and Bishan.

Now back to CDL, the Kwek family is conservative. Look at their gearing and the fact that they are the only listed property developer to carry land bank at cost. There is no revaluation surplus. The Kweks are know to dislike scholars, bookworms who cannot stand the test of the market.

My 1 cent

Thanks for the valuable insights on both CDL and Capitaland. My impression of Mr Kwek is that he is a very shrewd man - maybe it runs in the family. haha!

[behappyalways]

From The Business Times

CityDev sees no more measures on S'pore property

SINGAPORE - City Developments, Southeast Asia's second-largest property developer, reported a 17 per cent rise quarterly earnings and said it does not expect Singapore to introduce more measures to curb housing prices in the wake of worries over the global economy.

In the last week, stock markets around the world have see-sawed as investors were spooked by a downgrade of the US credit rating and grew increasingly nervous over the solvency of some European banks.

'I don't believe (the government) will come out with new measures to destabilize the market, especially after S&P re-rated the US credit rating, the world is suddenly more uncertain now,' said Kwek Leng Beng, executive chairman of CityDev.

Governments across Asia, including China and Singapore, have introduced several rounds of policy measures aimed at stemming speculative demand for residential properties and keeping mass market housing affordable.

Although some slowdown in the private residential property market is expected, CityDev said that recent volatility and uncertainty in the equity markets, together with high liquidity and a low interest rate environment, will help to support demand for properties.

'These factors continue to encourage buying of real estate assets, which still remain a relatively stable and reliable instrument for investment. This will help to limit the fall in property prices, even if some oversupply prevails,' the company said.

CityDev, which owns 54 per cent of London-listed hotel group Millenium & Copthorne, said second quarter net profit rose to S$220.9 million ($182.3 million) from S$188.9 million a year ago, helped by contributions from its hotel operations and rental properties.

However, RBS said CityDev's results for the first half of the year were disappointing, mainly due to the residential sector.

'We expect slower developer sales going forward as buyers adopt a wait and see attitude in view of the current global uncertainty,' RBS said in a report. The bank has a hold rating on the stock with a target price of S$11.70.

At 0111 GMT, shares of CityDev were 2.5 per cent higher at S$10.15, compared to the benchmark stocks index's 1.3 per cent gain.

It declared a special interim ordinary dividend of 5 Singapore cents per ordinary share on Friday.

Larger rival CapitaLand reported a 27 per cent rise in second quarter net profit excluding revaluations and impairments to S$171.3 million.

Source: REUTERS

[winston]

not vested

Singapore property developer City Developments said on Thursday, its third-quarter net profit fell 32.4 percent to S$132.1 million from a year earlier, partly hurt by lower contribution from rental properties.

Source: Reuters

[winston]

not vested

Singapore's City Developments Q4 net profit down 32 pct

SINGAPORE, Feb 29 (Reuters) - City Developments , Southeast Asia's second-largest property developer, posted a 32 percent fall in fourth quarter net profit on Wednesday, hurt by lower rental income.

CityDev, which owns 54 percent of London-listed hotel group Millenium & Copthorne , said net profit fell to S$163 million ($130.16 million) in October-December, from a restated S$241 million a year ago.

Looking ahead, Executive Chairman Kwek Leng Beng said the hotel operations are expected to perform well, with its London properties boosted by the upcoming Olympics, the Queen's Diamond Jubilee and Farmborough International Airshow.

Within Singapore, sales of new residential property remained strong but the firm "is cognizant that market conditions could be affected by the global economic conditions in the months ahead".

Larger rival CapitaLand said earlier this month its fourth quarter net profit fell 20 percent to S$476.6 million, due to lower earnings from developments and smaller portfolio gains.


Source: Reuters

[winston]

not vested

RESEARCH ALERT-OCBC downgrades City Developments to sell

SINGAPORE, March 1 (Reuters) - OCBC Investment Research downgraded City Developments Ltd (CDL) to "sell" from "hold" and raised its price target to S$8.92 from S$8.38.

City Developments which is Southeast Asia's second-largest property developer, posted a 32 percent year-on-year fall in fourth-quarter net profit on Wednesday, hurt by lower rental income.

By 0249 GMT, CDL shares were up 0.45 percent at S$11.18. The company's share price has risen 25 percent since the start of the year.

STATEMENT: OCBC said CDL's net profits of S$799 million ($640.76 million) for the year to December were in line with its expectations and said the developer's hotel segment put up healthy numbers due to higher average room rates.

"We expect numbers from hotels to stay relatively firm, particularly in London where hospitality assets are likely to outperform with the upcoming Olympic Games," the brokerage said.

Owing to the share price appreciation since the start of the year, OCBC believes the current "risk-reward proposition appears unfavourable".

"Our fundamental view remains unchanged that uncertainties in the domestic residential sector persist, which could bear on CDL given its significant landbank of 5.56 million square feet," OCBC said.

Source: Reuters

[iam802]

Target raised. And it's a sell?

[winston]

not vested

City Developments, Southeast Asia's second-largest developer, posted a 45 percent drop in first quarter net profit to S$156.8 million ($125.1 million) on Thursday, hurt by lower margins from property development and an absence of one-time gains.


Source: Reuters

[winston]

not vested

Property developer City Developments said its second quarter net profit plunged 37.7 percent to S$137.7 million from a year ago, partly due to the lack of one-off divestment gains.


Source: Reuters

[winston]

not vested

Property developer City Developments said its third quarter net profit rose 1.8 percent to S$134.5 million from a year ago, helped by higher sales of residential units but higher costs weighed.


Source: Reuters