City Developments Limited (CDL) reported its 4Q18 results which were in-line with our expectations. Revenue and PATMI fell 40.6% and 54.7% YoY to S$788.3m and S$77.9m, respectively.

If we exclude S$94.1m of impairment losses for hotels and S$20.1m of allowance for foreseeable losses on two smallscale development projects in Central London, as well as a divestment gain from two Chongqing projects in 2017, PATMI would instead have increased by 17% YoY.

For FY18, revenue rose 10.3% to S$4,222.6m. PATMI of S$557.3m represented growth of 6.7% and this constituted 99.9% of our forecast. A special final dividend of 6.0 S cents/share was declared, on top of a final ordinary dividend of 8.0 S cents/ share. This brings full-year DPS to 20.0 S cents, higher than the 18.0 S cents paid in FY17.

In 2018, CDL sold 1,113 units in Singapore with total sales value of S$2.2b, while 259 units and 18 villas were sold in China with total sales value of RMB1.3b (~S$269m). Looking ahead, CDL plans to launch five projects in Singapore this year, with three in 1H19 and two in 2H19.

We will provide more details after the analyst briefing. Maintain BUY on CDL but our fair value of S$10.73 will be up for review.

Source: OCBC Research - 21 Feb 2019