City Developments (CDL)

[LionFlyer]

getting more complicated.

https://www.straitstimes.com/business/cd...therine-wu

[Big Toe]

Instead of getting together to better the financial position of CDL, they decided to fight amongst themselves.
Instead of learning lessons from the mega sincere loss, and implement stricter due diligence and be more prudent, they decided to be involved in mudslinging and sue each other. Well done.

[EnSabahNur]

I don't follow CDL but I recall that acrimony over the Sincere Property investment.

Wouldn't this raise concerns about governance and lead retail shareholders to consider exiting?
I'm genuinely curious if there are good reasons to remain shareholders after that came to light.

The price in 2020 range from 6.48 to 7 plus. Would be a nice exit and save one some pain. All in hindsight of course but can't say that there were no red flags before the current events happened.

"The elder Kwek pointed to past business decisions under his son's leadership that have "put CDL in a precarious position", including a S$1.9 billion loss from CDL's investment in Chinese developer Sincere Property in 2020 and poor returns from UK property ventures.

The Sincere deal was supposed to be CDL's most ambitious expansion into China, but the COVID-19 pandemic put a dent in plans. The Chinese firm was also in a worse financial state than expected.

This is not the first time relations have been strained in the Kwek clan.

In 2020, Kwek Leng Beng's cousin Kwek Leng Peck resigned as non-executive and non-independent director of CDL after more than three decades, citing disagreements over the Sincere investment, which was led by Sherman Kwek."

[weijian]

Since the chairman and CEO are father and son (with an external interim hire only staying for a short time), it takes guts to hire an external pair of eyes to look into your work. But I suppose there is "not much face left to lose" with the ugly laundry left out to dry in full public view last year. Nonetheless, post the internal dispute saga, CDL OPMIs have something to look forward to.

CDL strategic review ‘timely’ after last year’s disputes, Sherman Kwek tells shareholders

The property giant is looking to “revamp” its strategy and better articulate its value to investors, and has appointed global advisory firm Teneo for the task.

Kwek said that the move came after CDL “went through some difficulties last year”. He cited not only geopolitical challenges but also “internal disputes and issues”.

He explained that CDL’s current strategy launched in 2018, focusing on expanding its asset portfolio, strengthening recurring income and unlocking value through capital recycling. “We needed external validation whether this strategy is appropriate (and) relevant, and (whether) we communicated it properly to our shareholders.”

Kwek shared that the group has internal plans in place, and the elder Kwek remains “healthy and vibrant”. “We will continue to work together as a team, and until such time when he decides and makes that decision.”

He attributed the slower progress partly to a prolonged high interest rate environment, which made fundraising and new listings more challenging. This included a previously planned Reit listing of CDL’s London office assets, which was later shelved.  “We will still continue to explore and see whether we can get some of these fund management ambitions done soon,” noted Kwek.

He also acknowledged that retail is not one of the group’s core strengths, given the scale it requires to operate efficiently. For instance, larger retail-focused peers benefit from established tenant networks that support pre-leasing rates when opening new malls. Meanwhile, CDL’s retail assets are typically part of mixed-use developments acquired through land tenders, where the group’s focus is on the residential component. “If we don’t think we’re the best people to manage it, or we think we can sell (the retail portion) for a very high price, maybe that’s where we go,” said Kwek. “At the end of the day… it’s about maximising shareholder value.”

https://www.businesstimes.com.sg/propert...areholders

[weijian]

An underwhelming outcome I would say, although I don't think it would have ever been bold/transformative to begin with...

Most of the numeral targets also don't look like "stretched numbers" to me - (1) The 1bil PATMI gain is probably accumulative and since CDL accounts for most of its properties at cost + depreciation, they are not fair value accounted. Therefore, any accounting gain upon disposal is not expected to be a small sum as many of the potential divestments have been held for a long time. (2) While the 10bil AUM over 3 years is a double from the existing 5bil AUM (which itself is inflated from accounting IREIT Global as 100%), the absolute 5bil increase is a small sum.

CDL to invest S$5 billion, target S$6 billion divestments under refreshed strategy

Unveiling the outcome of its strategic review on Monday (Sep 28) morning, CDL said that its new “GET+” plan marks the group’s “next chapter of value creation, with clearer strategic priorities, active portfolio management, measurable financial targets and greater accountability”.

There will be four measurable outcomes under the strategy, which will run from FY2027 to FY2029:

At least 35 per cent in dividend payout ratio on reported net profit annually
Around 55 per cent in net gearing by FY2029
More than S$1 billion in net profit from divestment gains
S$10 billion in assets under management (AUM)

Fund management will also become a more significant part of CDL’s capital model, said the property developer. The group is targeting S$10 billion in total AUM by FY2029, up from S$5 billion as at Jun 30, 2026.

To reach its target, CDL will establish a dedicated fund management entity, with an investment committee and leadership team that will be directly responsible for AUM growth and financial accountability.

The review, which was announced in February this year, comes after a public fallout between CDL’s group CEO Sherman Kwek and his father, executive chairman Kwek Leng Beng, over control of the company. The matter has since been resolved.

https://www.businesstimes.com.sg/compani...d-strategy

[weijian]

Prof Mak has published an anonymous analyst report on his website - valid points but this anonymous analyst "revealed himself" in his last paragraph with a blatant call for Chairman Kwek to return

IMHO, I haven't seen a lot of successful Singaporean businessmen still hanging around in their 80s. If CDL needs Chairman Kwek (age 85 as of 2026) to "return and step out of the shadows", it is a strong signal for OPMIs not to stick around!

An Anonymous Analyst’s Views: The Real Reasons Why CDL Lost $1 Billion in Market Cap

Today, I received an anonymous analyst report which explained why CDL lost $1 billion in market cap since it announced the outcome of its strategic review before the market opened on Monday, 28 September (it has fallen by nearly $1.1 billion at the time of writing this, since the close of trading last Friday). Given the lack of critical analysis in the mainstream media articles and the bullishness of analysts quoted in the media who are maintaining their buy calls, I thought I will publish this analysis in full for a different perspective. I was not at the briefing so I cannot confirm observations in the article that are based on the briefing. However, I largely agree with the analysis, and at the end, I provide some personal observations.

...................

The Path Forward: The Chairman Must Return

The S$1 billion wipeout is the steep price of a strategy that ignores market realities. If CDL wishes to close its persistent conglomerate discount, it must pivot from rhetoric to rigorous capital discipline.

The market has spoken, and it is clear that a slide deck alone cannot fix this. To stop the bleeding, Executive Chairman Kwek Leng Beng must step out from the shadows and personally intervene to stabilize the market. We need the Chairman to halt the risky overseas deployments, enforce a mandatory share buyback framework to provide a floor for the stock, and fundamentally clean up the corporate governance structures. Only by stepping in decisively can the Chairman restore the trust and value that his father, Kwek Hong Png, spent a lifetime building.

https://governanceforstakeholders.com/20...arket-cap/