Pre-tax profit from property development of $68.7m accounts for 58% of total PBT, but this was a 56%-yoy decline. Income was recognized from projects such as The Solitaire, Cliveden at Grange and Tribeca. We expect Livia and The Arte (which is already under construction and about 75% sold) to contribute to its full-year earnings.
Millennium & Copthorne (M&C) continues to suffer from the economic meltdown, as its RevPAR (on a constant currency basis) declined by 18%, while EPS slumped by 52%. Despite the challenging business environment, M&C is remains cashflow generative, and is lowly-geared at 16%.
Demand to CDL’s launches at Livia and the Arte this year has been encouraging. The former Hong Leong Garden site could be launch-ready by 4Q09. While the construction of The Quayside at Sentosa Cove is expected to be completed by 2011, CDL may only launch it near/after completion to achieve better returns. We estimate the project’s breakeven cost to be $820 psf.
CDL’s landbank of about 5m sq ft in GFA gives the Group tremendous flexibility in timing its launches depending on the demand it sees in the market, and sales have been encouraging year-to-date. FY10 earnings may even surprise on the upside if the market recovers in 2H09. Reiterating our BUY recommendation with a target price of $9.30, pegged at parity to its RNAV.
Sponsored Links
No comments:
Post a Comment