City Developments Ltd: Buoyed by property development
City Developments Ltd (CDL) reported a 19.6% YoY and 25.5% QoQ
increase in 2Q10 revenue to S$941.7m. CDL enjoyed contributions from
projects including the Cliveden, One Shenton, The Arte, Tribeca, Livia,
and The Gale. PATMI of S$164.6m was up 17.6% YoY and 18.1% QoQ.
Property development was the star performer, contributing more than 50%
to CDL's profit before tax for the quarter. CDL's hotel operations were the
second key profit contributor, boosted by the recovery in the hospitality
sector. Its results were also uplifted by the recognition of a gain on disposal
of The Office Chamber in 2Q10. CDL has enjoyed strong pre-sales at projects
including Hundred Trees (396 units), Volari at Balmoral (85 units) and 386
Thomson (157 units). Profits from these sales have yet to be recognized.
Contributions from such projects should underpin earnings in the coming
quarters, even as CDL plans new launches. We will be attending an analyst
briefing later this morning. With a change in analyst coverage, we are placing
our previous HOLD rating and S$11.16 fair value UNDER REVIEW. (Meenal
Kumar)
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