City Dev (CDL) CS have added CDL to its CS AxJ Focus List. House believes multiple catalysts lie ahead for CDL, with further upside likely to be driven by potential:
1) further asset divestments to unlock portfolio value,
2) upside surprise on dividends in its FY15 results,
3) reinclusion into the FTSE EPRA/NAREIT index in mid-2016, and
4) tweaking of Singapore residential policy measures in 2H16.
Given its status as a proxy to the residential market, CDL is best positioned for a turnaround in the Singapore residential market sentiment in 2016, yet with current concerns overdone; assuming a 20% decline in both residential prices and commercial asset values, RNAV of $10.58 will still imply significant upside.
CS maintains Outperform with TP of $12.00.
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