Company Name: CITY DEVELOPMENTS LIMITED
| Research House: Deutsche Bank | Price Call: SELL | Target Price: 11.05 |
Stock Name: Wing Tai
Company Name: WING TAI HLDGS LTD
| Research House: Deutsche Bank | Price Call: HOLD | Target Price: 1.98 |
Deutsche Bank downgrades City Developments (C09.SG) to Sell from Hold and Wing Tai Holdings (W05.SG) to Hold from Buy, with unchanged target prices, citing the developers' vulnerability to a swing in Singapore's residential market after aggressive property curbs.
Among the developers covered by the house, "Wing Tai and City Developments have the highest sensitivity to residential prices with every 10% in price resulting in a 5% and 3.5% change in NAV respectively," it says.
DB keeps City Developments' target price at $11.05, at a 15% discount to RNAV; but it notes that the firm -- which has the largest exposure to Singapore residential among large caps -- faces "near-term pressure from slowing demand," exacerbated by its active replenishment of its landbank in the past year.
The house keeps Wing Tai's target price at $1.98, but flags the company's susceptibility to demand contraction due to its focus on high-end homes. City Developments is down 6.2% at $11.82, while Wing Tai falls 7.7% to $1.865.
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