Brokers remain positive on CDL of Singapore's 2nd richest man Kwek Leng Beng following strategic review
Brokers have maintained their positive calls for City Developments, controlled by Singapore's second-richest billionaire Kwek Leng Beng and his family, even after the firm's recent strategic review was met with muted investor response.
Three major brokerage firms - Citi Research, DBS Group Research, and RHB - have maintained their buy ratings on CDL despite a 10% drop in the property developer's shares following its strategic review. CDL plans to raise S$6 billion from the sale of commercial properties and hotels, and deploy S$5 billion in new investments across multiple markets.
The group's CEO, Sherman Kwek, emphasized that the asset-sale target was a floor, not a ceiling, and the firm could pursue further disposals. CDL also intends to establish a dedicated fund-management entity and leadership team with the goal of doubling its assets under management to S$10 billion by 2029. Analysts pointed out concerns such as potential earnings dilution from divestments and the lack of clarity on hospitality portfolio, China asset allocation, and execution risks.
However, they believe these concerns are addressable, and concrete evidence of CDL executing some key initiatives ahead should be a catalyst for the stock.
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