Brokers maintain ‘buy’ on CDL despite investor reservations over strategic review
Concerns include lack of ROE targets, potential earnings dilution and planned investments in China and Japan
City Developments Ltd (CDL) has retained its positive outlook on investors despite concerns raised following its strategic review. Analysts noted a lack of return on equity (ROE) targets, potential earnings dilution, and a planned allocation of 30% of investment capital to China and Japan. Despite these reservations, CDL's strategic review laid out a clearer path for asset divestments, fund-management growth, gearing, and profit growth.
The group aims to divest S$6 billion of assets and invest S$5 billion over the next three years, targeting profit gains from asset disposals and dividend payouts. CDL also plans to double its assets under management to S$10 billion by FY2029. While the review did not fully excite the market, analysts remain optimistic about the company's ability to execute key initiatives.
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