, Singapore

4 reasons why UOL may outshine CDL next year

UOL is estimated to generate 28% total return versus CDL's 7%.

While CDL could generate positive total return (+7% upside) in the year ahead on undemanding valuations, Maybank KimEng expects UOL (+28% upside) to outperform and advocate a switch from the former given its outperformance in 2016.

The research house cites four reasons as follows:

  • No sharp rebound in home sales. We believe Singapore will not relax property cooling measures anytime soon and expect home sales volume to stay weak. While we do not expect a sharp fall in home prices to hit developer’s balance sheets, slow sales will continue to weigh on profit outlook. Furthermore, developers will continue to be subjected to potential penalties from project deadlines. As CDL’s recent deal on PPS 3 showed, developers may have to compromise on profitability when offloading projects facing deadlines. CDL has a larger residential exposure than UOL.
  • Defensive positioning favours Developers with larger recurring income base. With heightened risk aversion in the market, we believe property developers with a larger recurring income base will outperform. UOL has a larger base of recurring income than CDL.
  • Resilient office prices. Strong institutional interest in office properties and high land cost suggests that office prices will stay resilient despite a weak rental outlook. UOL has a larger office exposure than CDL. 
  • Larger discount to underlying assets. We see more downside protection for UOL as it trades at a larger 42% discount to the market value of its underlying assets than CDL’s 20%. 


Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Get Singapore Business Review in your inbox
They failed to properly monitor individuals onboarded as advisors, directors.
Chua spent 18 years with UBS Wealth Management prior to his new role.
Private-sector economists polled by the Monetary Authority of Singapore expect higher growth, faster inflation in 2021.
The leading F&B establishment operator expands its retail line of condiments and flavourings.
This deepens SGX’s partnership with Nikkei Inc.
These three stocks saw significant growth in trading turnover year-to-date.
The project with a 280-bed capacity is expected to operate by 2022.
Singapore Airport Terminal Services saw the sharpest decline during Monday's trading, with a 1.21% drop.
And the G-7 states demand a probe on the origins of the COVID-19 pandemic.
Approximately 35% of MSEs in the F&B and retail sectors saw their earnings drop by more than half during the Phase 2 Heightened Alert period, according to a DBS survey.
Enterprise Singapore extends the programme that supports food and beverage businesses in providing food delivery services.
The Baht 40b debentures were 1.52 times oversubscribed.
The fund was announced at the inaugural CapitaLand Sustainability X Challenge.
Mapletree Logistics Trust saw the sharpest decline during Friday's trading, with a 0.99% drop.
This may be one of the last times the troubled water treatment firm could meet with securities holders before shutting down.