City Developments Ltd (CityDev) announced that 4Q16 PATMI decreased 40.6% YoY to S$243.8m mainly due to the absence of contributions from the group’s 2nd PPS platform recognized in 4Q15.

In terms of the topline, however, 4Q16 revenues increased 36.5% YoY to S$1.2b, cumulating to a record S$3.9b of revenues in 2016 which similarly showed an 18.2% increase.

The growth is attributed to maiden contributions from Hong Leong City Center in Suzhou, sales at Singaporean developments and full recognition upon TOP from the fully sold Lush Acres EC which obtained TOP in June 2016.

Overall, we see this as a respectable set of results which came in broadly in line with expectations.

Note that the group has also proposed, in addition to a final dividend of 4.0 S-cents per share, a special final dividend of 8.0 S-cents per share. This brings total dividends in 2016 to 16.0 Scents per share.

We will attend an analyst briefing this morning and, in the meantime, maintain BUY with our fair value estimate of S$9.89 under review.

Source: OCBC Research - 23 Feb 2017