City Developments - Phillip Securities 2023-11-29: Business As Usual

• City Developments (SGX:C09)’s net gearing ratio (after factoring fair value on investment properties) now stands at 58% following the completion of various acquisitions in 2023. No financials were provided for the 3Q23 operational update.
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• We maintain BUY with an unchanged target price of $8.22, a 45% discount to RNAV of S$14.94. No change in our forecasts. We view City Developments as a proxy for the Singapore residential market and hospitality recovery.

The Positives

Singapore residential market remained resilient despite cooling measures.

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• Looking ahead, City Developments plans to launch Newport Residences in 1H24 after it was delayed due to the cooling measures, as well as the 512-unit Lumina Grand EC at Bukit Batok West Avenue 5 in 1Q24. We anticipate strong demand for Lumina Grand EC as it is near three MRT stations and the new Anglo-Chinese School (Primary), which is relocating to Tengah in 2030.
• Also, City Developments has secured a 155k sq ft residential Government Land Sales (GLS) site at Champions Way for S$295mil (or $904 psf ppr) in Sep 2023, pipping five other keen competitors. This project is slated for launch in 2H24 and will comprise about 350 residential units.

Hospitality segment continues to improve.

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Darren Chan Phillip Securities Research | https://www.stocksbnb.com/ 2023-11-29 SGinvestors.io

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