- City Developments (SGX:C09)'s 1H24 net profit missed expectations on lower development project recognition and higher costs. During the analyst briefing, management guided for a clear deleveraging path with an aim to lower gearing to below 60% by 2025, which we see positively.
- - Read this at SGinvestors.io -
- City Developments share price has underperformed mainly on low ROE concerns and index exclusion, but successful asset monetisation should help uplift returns and act as a catalyst.
More divestments than acquisitions ahead in the near term.
- Year-to-date, City Developments has achieved a portfolio divestment value of ~S$271m mainly from sale of strata units at its various industrial and retail assets in Singapore at a good premium. Management acknowledged it is behind its S$1bn divestment target set earlier this year. This is mainly due to buyers adopting a wait-and-watch approach, as well as requiring a longer lead time for decision making due to market uncertainties.
- - Read this at SGinvestors.io -
- For 1H24, acquisitions totalled S$1.1bn, mainly from the acquisition of the Zion Road residential site and Hilton Paris Opera hotel. Overall net gearing as a result rose to 69% (4Q: 61%).
Resilient residential sales with two launches planned in 2H.
- Read more at SGinvestors.io.
Vijay Natarajan RHB Securities Research | https://www.rhbgroup.com/ 2024-08-15
Read also RHB's most recent report:
2024-11-26 City Developments - Resilient Singapore Performance; BUY.
Previous report by RHB:
2024-09-25 City Developments - Beneficiary Of Rate Cut Cycle; BUY.
Price targets by 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
