Company Name: CITY DEVELOPMENTS LIMITED
| Research House: CIMB | Price Call: SELL | Target Price: 9.05 |
CIMB Research has cut its target price for Singapore property developer City Developments to $9.05 from $9.14 and kept its underperform rating.
CityDev shares were 0.2% lower at $10.20, but have gained about 15% since the start of the year.
CityDev, Southeast Asia’s second-largest developer, posted a 45% drop in first-quarter net profit to $156.8 million on Thursday, hurt by lower margins from property development and an absence of one-time gains.
This was below CIMB’s expectations because of disappointing profit margins for new projects, which could be a recurring trend with new sales largely from the mass market, the broker said.
CIMB cut its core earnings-per-share estimates for CityDev in 2012-2014 by 3-14% due to higher cost assumptions, it said.
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