Venturing into China - Citi

Results largely in line. For 2Q10, CityDev reported a net profit of S$165m,

reflecting an 18% rise qoq. Including the 1Q net profit of S$139m, 1H10 earnings
are S$304m. This is equivalent to 47% of consensus estimates of S$642m and
49% of our estimate of S$623m for FY10.

 Property development led growth. By segments, property development continues to
be the main driver of profit before tax, contributing over 60% of the total PBT.
Profits were booked for Cliveden, One Shenton, The Arte, Wilkie Studio, Shelford
Suites, Tribeca and The Residences at W. Both Tribeca and The Arte were
completed in 2Q10.

 Sales update and impending launches. In 1H10, the group sold a total of 773 units
amounting to sales value of S$0.95bil. Year-to-date (9 Aug), they have sold 934
units with sales value of S$1.2bil. The key contribution in the last month came
from the sold-out 368 Thomson (157 units). CityDev plans to launch 2 projects in
3Q10: the 642-unit NV Residences located in Pasir Ris and the redevelopment of
Copthorne Orchid (150 units). As for its other luxury-end landbank, management
is of the view that 2011 would be a better time to launch luxury projects.

 Venturing into China. City Devt will invest an initial S$300m to set up its presence
in various cities throughout China. Mr Sherman Kwek has been appointed as the
CEO of CDL China Limited to lead this initiative.

 Sell rating maintained for valuation reasons, TP at S$9.80 (from S$9.60). We are
leaving our estimates largely unchanged for 10/11E but have raised our RNAV and
TP to S$9.33 and S$9.80 respectively to reflect the higher valuation of M&C and
slightly higher selling price of its mass market projects.