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CDL’s share price sink 1.27% after Q1 profit more-than-doubled; China investment deal bites

CDL’s shares slumped S$0.11 to S$8.57 at around 2.30pm Singapore time on Wednesday.

Property developer City Developments Limited (CDL) posted a net profit that more-than-doubled for the first quarter ended March 31, at S$199.6 million compared to S$85.3 million a year ago, supported by strong profit margins for its development projects and a S$144.3 million pre-tax gain from the divestment of Manulife Centre.

Earnings per share for the quarter was at 22 Singapore cents, compared to 9.4 Singapore cents a year ago.

In a separate announcement, the group said it has entered into deals to invest 5.5 billion yuan in Chinese real estate developer Sincere Property Group. The near-term uncertainties over the United States-China tariff war and China’s ongoing economic slump sent the firm’s stock lower after the morning announcement.

CDL share price

CDL’s shares slumped 1.27% or S$0.11, to S$8.57 at around 2.30pm Singapore time on Wednesday.

The company’s shares had opened lower at S$8.64, compared to yesterday’s S$8.68. Year-to-date however, CDL’s shares have risen by 7%.

CDL earnings report highlights

Revenue for the quarter fell by 29.5% to S$746.2 million, from S$1.06 billion a year ago. The sales included revenue from The Criterion executive condominium, following its completion in February last year.

The group said its rental properties took the lead in the performance for the first quarter, contributing 68% in pre-tax profits primarily attributable to the divestment of Manulife Centre and contributions from recent acquisitions.

The group’s property development segment came in second in performance for the quarter, mainly supported by several of the group’s key local projects including Gramercy Park, New Futura, as well as overseas projects like Hong Leong City Center in Suzhou and the Hongqiao Royal Lake in Shanghai.

5.5 billion yuan investment in China property developer

The developer said it has entered into deals to invest 5.5 billion yuan in Chinese real estate developer Sincere Property Group. The investment which is CDL’s largest in China to-date, will comprise of a share subscription and a four-year interest-bearing loan.

The investment is expected to complete by the fourth quarter of this year. Once the deal is completed, CDL will attain a 24% equity stake in Sincere.

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