Analyst Darren Chan of Phillip Securities maintained a Buy rating on City Developments, with a price target of S$8.34.
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Darren Chan’s rating is based on several factors that highlight the potential for City Developments’ growth and profitability. Despite a 3.9% increase in PATMI to S$91 million for the first half of 2025, which was below expectations due to foreign exchange losses, the underlying performance excluding these effects showed a significant 323% year-on-year increase. This reflects the company’s robust operational performance, particularly in property development, which saw a remarkable 1800% rise in profit before tax driven by strong residential sales in Singapore.
Moreover, City Developments has been actively engaging in capital recycling through divestments, contracting over S$1.5 billion year-to-date, including a substantial sale in South Beach expected to yield significant gains. These divestments are anticipated to be completed in the second half of 2025, potentially narrowing the RNAV discount and enhancing shareholder value. The company’s strategic moves, combined with strong sales performance and potential special dividends, underpin the Buy rating, despite the elevated net gearing which is expected to be managed through the proceeds from divestments.
Chan covers the Real Estate sector, focusing on stocks such as City Developments, Ascott Residence, and Prime US REIT. According to TipRanks, Chan has an average return of 7.4% and a 72.55% success rate on recommended stocks.
In another report released on August 14, UOB Kay Hian also upgraded the stock to a Buy with a S$8.50 price target.