City Developments - Recovery Momentum From Hotel Segment
- In its 1Q22 business update, City Developments (SGX:C09) indicated that its business segments continued to display good momentum, as pandemic restrictions ease and borders reopen. The group continued to unlock value from its portfolio; in addition to Millennium Hilton Seoul and Tanglin Shopping Centre, City Developments is unlocking value from the collective sale of Golden Mile Complex for a total of S$700m in May 2022, where it has a 6.3% share of total Share Value and 34.8% stake of Strata Area of the property.
- Hotel operations posted a strong quarter, with portfolio RevPAR more than doubling y-o-y to S$89.6/room night in 1Q22. Accordingly, GOP margin increased to 14.6% in 1Q22 vs 6.1% in 1Q21.
- We leave our FY22-24F estimates for City Developments unchanged. Our target price of S$8.97 for City Developments is based on a 45% discount to RNAV of S$16.30. Our current projections have not included divestment gains from Tanglin Shopping Centre and Golden Mile Complex. City Developments is still trading at an attractive 50% discount to RNAV.
Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
LOCK Mun Yee CGS-CIMB Research | https://www.cgs-cimb.com 2022-05-24 2022-05-24
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