In-Depth Analysis of Singapore’s Leading Companies: November 2024

Report by Lim & Tan Securities, 25 November 2024

City Developments Limited (CDL): A Strong Contender in the Real Estate Market

City Developments Limited (CDL), a stalwart in Singapore’s real estate market, reported robust sales figures for the third quarter ending September 30, 2024. The Business Times highlighted CDL’s impressive sales of S\$611.1 million from 321 units, a significant jump from S\$325 million and 183 units sold in the same period last year. This surge in sales was primarily driven by the launch of Kassia, a 276-unit freehold development, which alone sold 179 units.

Throughout the nine months ending September 30, CDL and its joint ventures sold 905 units, generating a total of S\$1.8 billion. The Tembusu Grand at Katong achieved a 91% sale rate, while The Myst at Upper Bukit Timah Road sold 73% of its units. CDL’s new launches, like Norwood Grand in Woodlands, saw 84% of its units sold during the launch weekend. With moderating interest rates, CDL anticipates increased market activity and has exciting plans for future projects, including The Orie.

With a strong financial position and strategic launches, CDL remains a key beneficiary of the residential housing demand. Lim & Tan Securities maintains a “BUY” recommendation on CDL, noting its undemanding price-to-book (P/B) ratio of 0.5x and a target price of S\$8.

CapitaLand Investment Limited (CLI): Driving Growth with Strategic Diversification

CapitaLand Investment Limited (CLI) is on a mission to accelerate its geographical diversification across Asia Pacific, Europe, and the US. At its Investor Day, CLI leaders emphasized their commitment to doubling funds under management (FUM) to S\$200 billion by 2028. The company aims to boost operating earnings significantly, driven by its Fee Income-related Businesses (FRB), which account for 60-70% of total earnings.

CLI is strategically expanding its REITs platform, private funds, and lodging management through organic growth and M&A. The company’s recent 40% investment in SC Capital Partners Group further solidifies its presence in Japan’s REIT market. CLI’s CEO, Mr. Lee Chee Koon, outlined plans to rebalance portfolios across India, Southeast Asia, and China while targeting growth in Japan, Korea, and Australia.

As CLI pivots to an asset-light model, it continues to focus on capital efficiency, recycling S\$24 billion across its group since 2021. The company’s investment strategies are themed around demographic shifts, disruptions, and digitalization, presenting opportunities in lodging, wellness, and logistics. Lim & Tan Securities recommends a “BUY” on CLI, citing its attractive valuation and a target price of S\$3.55.

Frasers Logistics Trust: A Stalwart in Logistics REIT

Frasers Logistics Trust remains a key player in the logistics real estate market. With a forward dividend yield of 6.72%, it continues to attract investors seeking stable returns. The trust is strategically positioned to capitalize on the growing demand for logistics space, driven by global supply chain shifts and e-commerce growth.

Mapletree Pan Asia Commercial Trust: A Strong Dividend Prospect

Mapletree Pan Asia Commercial Trust is recognized for its robust forward dividend yield of 6.72%, making it a favorable option for income-focused investors. It leverages its strategic assets across Asia to provide consistent returns.

Jardine Matheson Holdings: A Diversified Conglomerate

Jardine Matheson Holdings, with a forward dividend yield of 8.52%, stands out as a diversified conglomerate. Its diverse business operations across various sectors provide resilience and growth potential, making it a preferred choice among yield-seeking investors.

Wilmar International Limited: A Leading Agribusiness

Wilmar International Limited is a key player in the agribusiness sector, with a focus on palm oil and other agricultural commodities. Its robust trailing EV/EBITDA of 9.42 underlines its operational efficiency and market leadership. Wilmar’s integrated business model and strategic market positioning make it a formidable player in the global agribusiness landscape.

Conclusion

The Singapore market is brimming with opportunities across various sectors, as highlighted by the diverse performance and strategic initiatives of key players like CDL and CLI. With favorable market conditions and strategic expansions, these companies are well-positioned for future growth. Lim & Tan Securities’ recommendations offer valuable insights for investors looking to capitalize on these opportunities.