Cdl Shares Resume Trading

City Developments, a property investment company, saw its stock price plummet by 5.47% upon resumption of trading today due to an internal dispute that has resulted in a court battle. The company’s shares had been halted on Feb 26 and a results briefing was cancelled at the last minute. The news of a disagreement between executive chairman Kwek Leng Beng and his son, group CEO Sherman Kwek, shocked the Singapore business community. CDL has released a statement saying that it will not comment on the validity of the allegations made as they are currently being addressed in court. The company assures shareholders that its business operations remain unaffected and it is “business as usual”. As the boardroom-cum-family dispute continues to unfold, analysts have downgraded their calls and reduced their target prices for CDL. UOB Kay Hian’s Adrian Loh has downgraded the stock from “buy” to “hold” and revised its target price from $7 to $4.60 based on past performance and current market conditions. Loh believes that the stock will struggle to perform well until the dispute is resolved. DBS Group Research analysts Derek Tan and Tabitha Foo see promise in CDL’s fundamentals despite the current turmoil. They have maintained their “buy” call but have lowered the target price from $10.50 to $6.70 based on a 60% discount to RNAV. Meanwhile, OCBC Investment Research also maintains a “buy” call but has reduced the fair value from $6.57 to $6.02 with a wider RNAV discount of 60%. Citi Research analyst Brandon Lee believes that the potential impact of this dispute is hard to quantify. While it may cause some uncertainty in the market, Lee believes that CDL’s underrepresentation in investors’ portfolios will lead to a positive resolution being a major catalyst for share price growth in the long run. JPMorgan analysts Mervin Song and Terence M Khi describe the situation at CDL as a “dynastic discord” and hope for a positive resolution and family reconciliation in the future. However, they have also reduced their target price from $6.05 to $4.85, based on a 60% discount to their RNAV estimate of $12.10 per share.