City Developments - DBS Research 2023-02-24: Reaping & Sharing The Spoils

City Developments - Reaping & Sharing The Spoils

  • City Developments (SGX:C09) delivered record-breaking FY22 results, recording a PATMI of S$1.3b vs S$85m in FY21, below our estimates due to our more optimistic view on divestment gains. See City Developments's announcement dated 23 Feb 2023.
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  • total gains of S$493m (including negative goodwill) on the deconsolidation of CDL Hospitality Trusts (SGX:J85) from the Group following the distribution in specie of CDL Hospitality Trusts in May22.
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  • S$81m of remaining exposure to Sincere Property Group,
  • impairment losses for doubtful debt for rental and accrued receivables from China investment property.
  • Excluding the divestment gains and impairment losses, hospitality saw the strongest recovery with an estimated PBT of ~S$91m vs pre-tax losses in FY21, property development saw lower contributions, estimated to be ~- 11% y-o-y.
  • City Developments's net gearing was relatively flattish at 84% vs 83% in 2Q22 (on fair value, gearing was 51% vs 52% in 2Q22 and 3Q22), while average cost of debt increased 0.5ppts to 2.4% vs 1.9% in 2Q22. With the rising interest rates, management guided that average cost of debt could increase to ~4% as hedging ratio remains low at 42%, albeit higher compared to 35% in 2Q22.
  • City Developments declared a total final dividend of 16 cents comprising final ordinary dividend of 8 cents and special dividend of 8 cents. Total FY22 dividend amounts to 28 cents, in line with our expectations, though a little lower compared to 32 cents in FY21 following the distribution in specie of CDL Hospitality Trusts units. See City Developments's dividend dates. Cash dividend has more than doubled y-o-y, sharing the rewards of divestment gains with shareholders.

City Developments – Key operation highlights

Recorded stronger property sales of 775 units, up 9% h-o-h from 712 units in 1H22 (-36% y-o-y).

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Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @

Rachel TAN DBS Group Research | Derek TAN DBS Research | 2023-02-24

Previous report by DBS:
2022-08-12 City Developments - Turning Into A Record Year.

Price targets by 3 other brokers at City Developments Target Prices.
Listing of research reports at City Developments Analyst Reports.

Relevant links:
City Developments Share Price History,
City Developments Announcements,
City Developments Dividends & Corporate Actions,
City Developments News Articles

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