City Developments offers ‘strong residential proxy’ for property: Maybank KimEng

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City Developments offers a “strong residential proxy” for Singapore’s property recovery, Maybank KimEng said in a note dated Wednesday.

“With Singapore’s residential market accounting for an estimated 34 percent of its RNAV, we see CityDev as the most liquid proxy for a residential rebound,” the brokerage said.

It pointed to three newly acquired sites — at Handy Road, West Coast Vale and Sumang Walk — as adding 930 private units and 820 executive condos to CityDev’s pipeline and making the developer an even stronger proxy to the recovering housing market.

The brokerage increased its 2018-19 earnings per share forecasts by 2 percent and its RNAV to S$14.19 from S$13.82; that was the driver for increasing the target, at parity with RNAV, to S$14.20. It kept a Buy call.

Maybank KE said full-year earnings per share (EPS) was in line with expectations, matching 96 percent of its forecasts.

For the full year, City Developments reported PATMI (profit after tax and minority interests) fell 14.6 percent on-year to S$780.4 million.

Maybank KE said it raised its average selling price forecasts, pointing to strong pricing at the New Futura development.

But it added, CityDev’s impending launch of South Beach Residences in mid-2018 will test the sustainability of the high-end market’s pickup.

The stock was flat at S$12.76 at 3:21 P.M. SGT.