Sunny Side Up - City Developments, The Hour Glass (KIM ENG)

Sunny Side Up - City Developments, The Hour Glass

What's cooking City Developments Limited (CIT SP, $10.70, BUY, TP $13.45) - After being shelved for three years, construction work at South Beach has started and is scheduled for completion in 2015. Malaysia-listed IOI Corporation is now onboard and will hold a 49.9% stake in this mega project, with City Developments holding the remaining 50.1%. We believe it is timely to revisit this iconic development and review our assumptions, given an increase in our RNAV estimate by 11 cents a share. Maintain BUY. Hot stock The Hour Glass (HG SP, $1.20, NOT RATED) - Riding on the recovering demand for luxury watches in Asia, net profit for The Hour Glass grew by 29% YoY in FY Mar11. This stellar performance did not go unnoticed as its share price rose steadily after the release of its financial results. At current valuations, the stock appears to be at comparable levels with its peers. Watch retailers, however, seem to be trading at lower valuation levels compared to fashion and lifestyle retailers like FJ Benjamin and Osim.