UOB Kay Hian analyst Adrian Loh downgraded the rating on City Developments (CDEVF – Research Report) to a Hold today, setting a price target of S$4.60.
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Adrian Loh has given his Hold rating due to a combination of factors impacting City Developments. The company’s 2024 financial results fell short of both UOB Kay Hian’s and market expectations, with revenue and profit after tax and minority interest (PATMI) experiencing significant declines. This underperformance was primarily attributed to the timing of revenue recognition in its Singapore property development segment and unexpected delays in certain construction projects, compounded by higher interest costs.
Furthermore, a highly publicized leadership conflict within the company has added to the uncertainty surrounding its future performance. The Executive Chairman’s legal actions against the CEO and other board members have created a significant overhang, which is likely to weigh on the stock’s performance. Consequently, Adrian Loh has adjusted the target price to S$4.60, reflecting a more cautious outlook given the current challenges facing City Developments.