CIMB Research has cut its target price for property developer Bukit Sembawang Estates to $5.72 from $5.80 but kept its outperform rating, citing lower than expected full year earnings.
Shares of Bukit Sembawang were 1.8% higher at $4.48 and have gained 14.3% since the start of the year, versus the benchmark Straits Times Index’s 5.4% rise.
Bukit Sembawang said its net profit for the fourth quarter fell 18.3% to $21.5 million from a year earlier. Its core profit for the fiscal year ended in March came in below CIMB's expectations, as the company saw lower recognitions from its projects.
But its balance sheet remained strong, CIMB said, allowing it to pay shareholders a higher-than-expected dividend of 18 cents, compared to 12 cents in 2011.
For the next fiscal year, CIMB expects Bukit Sembawang's earnings to be supported by pre-sales of Singapore residential developments Luxus Hills and Verdure.
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