City Developments - Phillip Securities 2024-03-05: Record Revenue Driven By Property Development

• City Developments (SGX:C09)'s FY23 PATMI of S$317.3mil (-75.3% y-o-y) missed our estimate by 15% due to higher-than-expected finance costs (+73% y-o-y). The y-o-y decline in PATMI was largely attributable to the absence of outsized divestment gains from the divestment of Millennium Hilton Seoul (S$926mil) in FY22.
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• We raise our FY24e PATMI estimate for City Developments by 15%, factoring in higher contributions from hotel operations.
• City Developments is a proxy for the Singapore residential market and hospitality recovery. It is trading at an attractive 55% discount to our RNAV/share of S$12.50.

The Positives

Record revenue in FY23 boosted by property development segment (+102% y-o-y).

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• In FY23, City Developments and its joint venture associates sold 730 units with a total sales value of S$1.5bn (FY22: 1,487 units with a total sales value of S$2.9bn). Sales were largely driven by The Myst and Tembusu Grand, which sold 60% of its 638 and 51% of its 408 units to date respectively. The launch of Lumina Grand EC in Jan 24 was well received, with 55% sold to date.
• City Developments plans to launch two projects in 2H24 - Union Square Residences (366 units) and Champions Way (348 units). It is still monitoring market conditions to determine the appropriate time to launch Newport Residences, which has no ABSD deadline.

Hospitality segment continues to improve.

• Read more at SGinvestors.io.

Darren Chan Phillip Securities Research | https://www.stocksbnb.com/ 2024-03-05 SGinvestors.io

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