He continues: “We raise our revised asset net value (RNAV) discount to 50% from 45% amid gearing concerns, but maintain our call with share prices trading near historic lows and two standard deviations (s.d.) below its price-to-RNAV ratio (P/RNAV) – limiting the downside.”
RHB Bank Singapore analyst Vijay Natarajan has kept his “buy” call on City Developments (CDL) with a lowered target price of $7.30 from $8 previously, after the company significantly underperformed at a 15% loss year-to-date against the Straits Times Index’s (STI) 3% rise.
“We believe investors fear its rising debt, which results in interest cost pressures and low return on equity (ROE). Management has reiterated divestments as a key focus this year (target: around $1 billion) – the materialisation of which will be a positive catalyst, in our view,” writes Natarajan.
