UOBKayhian on 17 Feb 2015
FY15F PE (x): 13.8
FY16F PE (x): 11.8
Results below expectations. City Developments (CDL) reported 4Q14 net profit of
S$384.9m, up 73% yoy, bringing full-year net profit to S$769.6m, up 12% yoy. Property
development PBT increased 47% yoy in 4Q14, largely due to full revenue recognition
from Blossom Residences which obtained TOP in Sep 14. The strong performance from
the hotel segment was primarily due to contributions from recently-acquired refurbished
hotels in the US (particularly Millennium Hotel Minneapolis), and the UK. The decrease
in pre-tax profit for rental properties was mainly attributed to an absence of substantial
gains on disposal of non-core investment properties. Excluding gains from the
securitisation of its Sentosa properties (Quayside Collection: W Hotel, Retail and The
Residences at W Singapore), results were below our expectations, mainly due to timing
differences. Maintain HOLD and target price of S$10.84, pegged at a 20% discount to
our RNAV of S$13.55/share. Entry price is S$8.70.
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