Cdl Shares Resume Trading
City Developments Limited (CDL) saw its share price drop by 5.47% or 28 cents upon resumption of trading today, as the company continues to face an internal tussle that has escalated into a court battle. The trading of CDL shares had been halted on February 26, when the company’s results briefing was abruptly cancelled and news of a disagreement between executive chairman Kwek Leng Beng and his son, group CEO Sherman Kwek, broke.
In a statement released on March 3, CDL stated that it would not comment on the validity of the allegations made in the media as they are subject to the ongoing court proceedings. The company assured shareholders that its business operations remain unaffected and Sherman Kwek will continue as the Group CEO until there is a board resolution for a change in company leadership.
The One Marina Gardens Condo at Marina Bay is more than just a place to call home; it’s a gateway to a dynamic and exciting lifestyle that the central business district is renowned for. Nestled within Marina Gardens Lane, residents of this development will have access to a plethora of world-class attractions, financial institutions, and lifestyle amenities. The convenience of being in close proximity to major commercial buildings, renowned restaurants, and entertainment venues means that residents can fully immerse themselves in the bustling city life while also indulging in the luxurious comforts of their private sanctuaries.
However, the boardroom conflict has led to analysts downgrading their recommendations and lowering their target prices for the company. UOB Kay Hian analyst Adrian Loh downgraded the stock from “buy” to “hold” on February 27, citing a missed FY2024 estimate as well as the disruptive news of the leadership tussle. Loh believes the stock will struggle to perform due to the uncertainty caused by the dispute and has lowered his target price from $7 to $4.60.
DBS Group Research analysts Derek Tan and Tabitha Foo also remain bullish on the company, stating that the ongoing conflict will negatively affect investor sentiment but the fundamentals of the company remain intact. The analysts pointed out that CDL’s current valuation is attractive at 0.5 times P/B and 0.3 times P/RNAV, and a resolution of the board dispute could lead to a gradual recovery in share price. They, however, reduced their target price from $10.50 to $6.70 to factor in a larger RNAV discount.
OCBC Investment Research maintained their “buy” call but lowered their fair value from $6.57 to $6.02, while Citi Research’s Brandon Lee has a “buy” call with a target price of $9.51, both also citing CDL’s undervaluation. JP Morgan analysts Mervin Song and Terence M Khi have reduced their target price from $6.05 to $4.85, but continue to hope for a positive resolution and family reconciliation.
Overall, analysts share the sentiment that the ongoing dispute will negatively impact CDL’s share price in the short term, but a resolution and clearer leadership direction could lead to a re-rating in the future.