InvestIdeas

not vested

City Developments - Value Emerging (HOLD, TP SGD9.42, CIT SP, Property)

3Q16 inline. Although 9M16 made up just 50%/54% of our full year sales/profits, we expect a strong 4Q performance to make up the difference.

We note that CNY3.2b of presold homes in China and the recently concluded deal on Nouvel 18 have yet to be recognised.

This will provide earnings visibility from 4Q16. Maintain HOLD with unchanged RNAV-based SGD9.42 TP on limited near term catalysts.

Nonetheless, we see value emerging with the recent share price correction.

Source: Kim Eng

not vested

The market hasn’t priced in this developer’s full value yet. Should investors jump in now?

By Gwyneth Yeo

SINGAPORE (Dec 1): City Developments has been actively unlocking the value of its portfolio through asset monetisation, and has another $3 billion worth of assets remaining that are suitable for injection into funds. Yet, its share price is trading at a 33% discount to its revalued net asset value.

UBS analysts Michael Lim and Kok Wai Fai are, however, unfazed by it. “There has been positive momentum on asset monetisation though the share price reaction to these transactions has been muted,” wrote the pair in a note on Wednesday. “We believe with continued execution on capital recycling, there is scope for the discount to narrow.”

As such, UBS is maintaining its “buy” recommendation on CDL with a lower target price of $9.90 from $10.05 previously.

To date, CDL has injected $3.5 billion in assets into three Profit Participation Schemes (PPS) and is expected to achieve its target of $5 billion by FY18.

Lim and Kok point out that the group has another $350 million industrial portfolio that has yet to be touched, and has a large retail portfolio with highly sought-after retail malls. It also has unsold residential units that could be injected into the next PPS.

Meantime, the pair expects CDL to focus more on its hotel business which is has been affected by falling demand through stringent cost management efforts. They also noted that CDL has been disciplined in its land bidding and asset churn strategy for its residential portfolio, which is essential given the weak home prices and buyer demand.

“Moving into 2017, we think a potential acceleration in price decline could prompt policymakers to rethink their stance on relaxation,” concluded the pair, with reference to the property cooling measures that were implemented in 2013 to curtail rising prices.

Shares of CDL are trading 2 cents higher at $8.46 on Thursday.

Source: The Edge

http://www.theedgemarkets.com.sg/sg/art ... s-jump-now

not vested

City Developments to be lifted by international properties

By Jude Chan

SINGAPORE (Dec 23): DBS Group Research says City Developments’ decision to diversify into the overseas property market is paying off.

“With most of its Singapore property projects having been completed or are soon-to-be-completed, we expect international properties (in UK and China) to drive property sales or revenue recognition in 2017 and 2018,” says DBS lead analyst Rachel Tan.

Tan adds that this could help offset the impact of a weak property market in Singapore.

DBS is keeping its “buy” recommendation on City Developments with a higher target price of $9.90, raised from $9.60 previously.

CDL saw 3Q16 earnings surge 60.1% to $170.3 million, from $106.4 million a year ago.

Earnings per share grew 59.8% to 18.7 cents for the quarter, from 11.7 cents in 3Q15.

Revenue increased 14% to $922.8 million from $809.3 million in 3Q15, driven by the property development segment, which continued to be the highest contributor to revenue at $371.8 million.

(See City Developments posts 60.1% rise in 3Q earnings to $170.3 mil on stronger sales and divestment gains)

“Supported by a strong balance sheet and diversified earnings base, CDL should be able to navigate well around the current uncertain market conditions,” Tan says.

She adds that CDL offers “good value” as it is trading at 0.8x FY17F P/NAV, at 1SD below historical average.

In addition, Tan says CDL could be further boosted by the potential injection of assets into Profit Participation Securities (PPS), improvement in hotel operations, and accretive acquisitions or land banking.

Shares of City Developments are trading 2 cents lower at $8.10.

Source: The Edge

http://smr.theedgemarkets.com/article/c ... up-content

not vested

Developers' outperformance to continue, CDL our top pick.

On the back of improving fundamentals, the Singapore developers are up 12.3% YTD, outperforming the STI by 6.2%.

We expect a continued re-rating of CDL, our top pick, on the back of gathering sales momentum.

At 22% discount to RNAV and 0.96x P/B (-1.1 S.D. from historical averages), CDL valuations remain attractive, with 19% potential upside to our RNAV-based target price of S$11.30.

Source: CS

not vested

City Developments Limited: Respectable set of results

City Developments Ltd (CityDev) announced that 4Q16 PATMI decreased 40.6% YoY to S$243.8m mainly due to the absence of contributions from the group’s 2nd PPS platform recognized in 4Q15.

In terms of the topline, however, 4Q16 revenues increased 36.5% YoY to S$1.2b, cumulating to a record S$3.9b of revenues in 2016 which similarly showed an 18.2% increase.

The growth is attributed to maiden contributions from Hong Leong City Center in Suzhou, sales at Singaporean developments and full recognition upon TOP from the fully sold Lush Acres EC which obtained TOP in June 2016.

Overall, we see this as a respectable set of results which came in broadly in line with expectations.

Note that the group has also proposed, in addition to a final dividend of 4.0 S-cents per share, a special final dividend of 8.0 S-cents per share. This brings total dividends in 2016 to 16.0 S-cents per share.

Source: OCBC

CityDev's FY16 earnings fall 15.5% to $653.2 million on absence of PPS profit
http://sgx.i3investor.com/servlets/fdnews/66500.jsp

CityDev sees 19% decline in 1Q earnings to $86 mil
http://www.theedgemarkets.com.sg/cityde ... ngs-86-mil

citydev-ceo-grant-kelley-resigns-developer-posts-18-drop-2q17-earnings-110-mil
https://www.theedgesingapore.com/cityde ... gs-110-mil

not vested

City Developments Limited: 1H17 home sales up strongly

2Q17 PATMI dipped 7.7% YoY to S$154.6m mainly due to the absence of contributions from Lush Acres EC for which profits were wholly recognized on completion in the 2Q16. Excluding the impact of Lush Acres, we understand that 2Q17 PATMI would have increased 43.4% YoY.

In terms of the topline, 2Q17 revenues similarly dipped 21.8% from the absence of Lush Acres’ revenues. We deem these results to be in line with expectations.

CityDev indicates that they are well positioned to benefit from an upturn in the Singapore residential market and sold 691 units in 1H17, more than double that in the same period last year.

Looking ahead, they look to launch New Futura and its new condominium projects in Tampines, Singapore and Teddington Riverside, UK over the next 12 months.

A special interim dividend of 4.0 cents per share has been declared.

After updating our valuation model with our latest assumptions and firmer ASPs, our fair value estimate increases to S$12.39 versus S$10.50 previously.

Source: OCBC

CDL-Hong Realty JV acquires Amber Park for $906.7 mil
https://www.edgeprop.sg/content/cdl-hon ... k-9067-mil