Shares of City Developments will likely be in focus after the developer reported full-year profit that may have missed some estimates, but issued a positive outlook.
While the earnings might be viewed negatively, the stock has already come off recent peaks, which may limit any losses. It closed Tuesday at S$12.73, well off January’s peak at S$13.48. If the stock falls, the February 9 low of S$12.25 may offer support.
For the full year, PATMI (profit after tax and minority interests) fell 14.6 percent on-year to S$780.4 million. In a November report, Nomura had forecast PATMI of S$527 million and noted that at that time, consensus forecasts were for S$566 million.
Gross profit for the full year fell 4.2 percent to S$1.68 billion. In a November report, Phillip Capital forecast gross profit at S$1.696 billion.
‘Property upturn just beginning’
But management was very optimistic on the outlook.
“After a challenging four-year period, there is a boost in sentiment for the Singapore residential market, with increased sales and prices,” Kwek Leng Beng, City Developments’ executive chairman said in the earnings release. “To drive growth, we will look to our property development business, particularly in Singapore where the upturn in the property cycle is only just beginning.”
Kwek noted the company has around 2,750 residential units in the pipeline, across the mass-market, mid-end and high-end segments.
To be sure, the recently announced budget was viewed by some analysts as a potential negative for Singapore’s property market.
The new stamp duty, announced in the reading of the budget, raises the stamp duty on the portion of the purchase price above S$1 million by one percentage point to 4 percent.