Tiger Singapore Weekly Focus-City Development Ltd (C09.SI)

Tiger_Wealth
2022-08-31

$CITY DEVELOPMENTS LIMITED(C09.SI)$ achieved strong results, despite the overseas property crisis happening now.

 Singapore’s benchmark $Straits Times Index(STI.SI)$ closed at 3,2469.53 on Friday (26th Aug 2022) and stayed almost stagnant as per last Friday. Overall, the market remains conservative as most investors are expecting the Federal Reserve to maintain their view to tighten monetary settings once again. On the whole, most investors’ view would be correct if their expectations are aligned with Powell’s speech last Friday night.

Corporate Profile of City Development Ltd (CDL)

City Development Limited provides real estate services that offers renting, buying, and selling residential, commercial, and hospitality services, including the provision of consulting services in Singapore.

CityDevelopment Limited (CDL)achieved a record net profit for the first half of 2022 and its highest records since its inception in 1963

Despite many properties crises happening around the world, which has resulted in a huge loss for investors, several of Singapore’s property-related groups still managed to post strong results for first half of 2022.

On 11th Aug 2022, City Developments Limited (CDL) reversed from a net loss of S$32.1 million and posted a record net profit of S$1.1 billion for the first half that ended June 30 compared to the same period last year. And this was also the highest net profit for CDL since inception in 1963.

CityDevelopment Limited (CDL) achieved strong record revenue performance, mainly driven by divestment gains from the sales of its properties

The City Development Limited (CDL) total profit of S$1.1 billion is contributed as per below:

  • Profit ofS$496.2 million from the sales of theMillennium HiltonSeoul from Korea (Overseas investment)
  • Profit of S$27.3 million from the sales of 23 warehouses in Singapore
  • Profit of S$492.4 million from group’s deconsolidation of CDL Hospitality Trusts (CDLHT)
  • Other profit is S$110.3 million

Source: https://www.businesstimes.com.sg/companies-markets

Also, the Board has proposed a special interim dividend of S$0.12 per shares, which is 4 times compared to last year’s special interim dividend. This was reminiscent of the dividends level before Covid such as in the year 2018 & 2019.

CDL Business outlook and prospects

The Company’s revenue is expecting to be more positive with the easing of border restrictions and supported by pent-up demand for travel. According to CDL executive chairman, Kwek Leng,hospitality business is expected to be a star performer for the rest of the year followed by easing of Covid restrictions in Singapore.

Next, as the effect from Hong Kong’s Covid quarantines, Hong Kong’s long-celebrated status as an Asian Financial hub is seems to be diminishing and there is high potential that Singapore will benefit from it, due to political stability and low taxes.

As what investors can see from recent news, because of an outflow of capital and talent from Hong Kong due to Covid quarantine and control, several big firms have chosen Singapore as their plan to relocate their employees or operation for their family reasons and client coverage, about the same time Singapore authorities streamlined COVID-19 travel and social restrictions.

All these reasons have indirectly contributed to boost the demand for the property sector in Singapore, whether for residential or office-renting purposes. And this might be one factor that has contributed to recent price spikes in property deals in Singapore’s properties market.

Source: https://www.channelnewsasia.com/commentary

Below is some useful information for City Development Limited (CDL) that you might consider before investing in it.

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