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Pinnacle
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15-Nov-2007 11:13
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CITI - Buy: Well Placed to Capture Demand at Various Stages of Cycle Buy/Low Risk 1L Price (14 Nov 07) S$14.20 Target price S$18.00 Expected share price return 26.8% Expected dividend yield 2.0% Expected total return 28.8% Market Cap S$12,912M US$8,930M Results ahead of expectations. For 3Q 07, CityDev reported a net profit of S$169.5m, reflecting a 12% qoq decline but a 32% yoy rise. Including the 1H 07 net profit of S$320.5m, net profit for the first 9 months amounted to S$490m, equivalent 85% of full-year estimates of S$579m and 89% of consensus? estimate of S$547m. Residential accounted for 60% of pretax profit. Pretax profit from residential was up 10% qoq and 83% yoy with the recognition of profits from pre-sold projects such as City Square Residences, Tribeca and Monterey Park. JV projects such as St Regis Residences, The Sail @ Marina Bay, The Oceanfront @ Sentosa Cove, Parc Emily, Edelweiss Park, Ferraria Park, Botannia and Residences @ Evelyn also contributed. Launches in the pipeline. Over the next few months, the projects CityDev plans to launch include the 40-unit Wilkie Studio, 77-unit Shelford Suites as well as a 336- unit development at the former Lock Cho apartments at Thomson. All three are in the mid-tier segment where we expect demand to remain strong. CityDev also plans to launch The Quayside Collection (228 units) at Sentosa. Earnings raised, TP maintained at S$18. We have raised our earning estimates to reflect lower-than-expected interest expense. We maintain our Buy (1L) on the stock. CityDev?s large and diversified landbank provides the group significant flexibility in capturing demand for different segments at various stages of the property cycle. |
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mirage
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05-Oct-2007 08:42
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Singapore's CityDev leads property stocks higher on bullish prospects Most property stocks were trading higher in Singapore on Thursday led by City Developments, on market expectations of healthy property price growth and strong broad-based demand expected to last a few years. "The Singaporean macroeconomy is fairly sound. Foreigners especially still think that Singapore is a very desirable place to stay, so ultimately the demand for Singapore property should still remain for the next couple of years," Kim Eng Securities Research analyst Wilson Liew said. Kim Eng said he is most bullish on the growth prospects for the midrange segment of the property sector. "We think the sector is going to enjoy an increase of about 20-25 percent per annum," Liew said. Based on preliminary estimates from the Urban Redevelopment Authority (URA), property prices in the third quarter rose another 8 percent on the second quarter. It was the highest average growth recorded since the fourth quarter of 1999. URA said demand continued to be focused on high-end residential condominium projects in and around the central business district and the Orchard Road shopping belt, where prices rose by an average 8.3 percent during the third quarter. Meanwhile, prices of residential condominiums in the suburbs rose by an average 8.1 percent. "A review of caveats lodged shows that the solid price growth in the third quarter came despite a plunge in sub-sales in the quarter," CIMB-GK analyst Donald Chua said. "Sub-sales fell from 659 units in July to 259 in August, the month which saw a resurgence in mass market transactions. Although a dip in sub-sales normally signals a cooling down of speculative activity, we believe the corresponding increase in prices suggests improving demand fundamentals." CIMB-GK also sees CityDev, along with BukitSemb and United Overseas Land (UOL) as benefiting the most from the mass market recovery. It has maintained its "overweight" rating on the sector. Kim Eng picks City Developments as the best play among Singapore's property heavyweights given its exposure to a number of segments across the property sector. "Our favorite is City Development because they have the largest landbank in Singapore ... so we think that CityDev actually gives the investor the largest exposure to the Singapore property market," Liew said. Kim Eng has a "buy" call on the property developer with a target price of 18.80 Singapore dollars. At 3.22 pm, City Developments was up 10 Singapore cents at 16.40, CapitaLand was up 0.5 cents at 8.30 dollars and Keppel Land rose 0.5 cents to 8.60 dollars. Allgreen Properties was 6 cents stronger at 1.90 dollars while UOL was up 0.5 cents at 5.30 dollars. |
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