City Developments in no rush to launch South Beach Residences

It's taking its time.

According to Maybank Kim Eng, excluding the SGD5.8m of investment gains, CDL’s 3Q13 core PATMI came in at SGD115.0m (+42% YoY; +56% QoQ).

9M13 core PATMI of SGD291.3m came in below at 53% of our full-year estimate, due mainly to the timing of profit recognition and continued weak hotel earnings.

Here's more from Maybank Kim Eng:

We lower our FY13 core PATMI forecast by 8.6% as we adjust our profit recognition model. Maintain SELL, with a revised TP of SGD9.00, pegged to a 30% discount to RNAV, adjusted for the market value of its stake in M&C.

Residential still a mixed bag. Residential was the biggest profit contributor in 3Q13, accounting for 50% of PBT, with a number of pre-sold projects yet to contribute to earnings.

Recent launches, namely The Venue Residences and The Inflora at Flora Road, were met with mixed responses, achieving sell-through rates of 25% and >95% respectively, with pricing being a determinant of demand. Management is in no rush to launch South Beach Residences (ASP SGD3,000 psf), perhaps biding its time to gauge the response at the upcoming launch of DUO Residences nearby.

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