They invent those "curve" mah
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Mai Gong Mo Jio...Yahoo Finance say CDL has very good potential as it is very undervalue...dun miss the boat
- Thread starter k1976
- Start date
Lower than Covid days,
CDL sinks below $5.50 in morning opening.
CDL sinks below $5.50 in morning opening.
Aiyah, stock price sure got up and down de.
Most important in long term trending
Tiagong, China Huat Big Big again lately de woh....Punters quickly 买定离手
Huat Big Big hah
Huat Big Big hah
NBCB tio pian. I bought some CDL shares in Jan now losing money lucky didn't hoot too much. Will hold as its intrinsic value is supposed to be $11+.
The CDL now is different from the CDL 20-30 years ago. In conclusion, they only know how to make money from their investors.
Earlier, i cited their ultra low-ball offer for those who waited for them two decades to redeem their retail preference shares. These are folks who are most loyal to CDL, and CDL promised to redeem them in the beginning, now many died while waiting.
Let me cite another example of how selfish they are. You look at HL Global Enterprises (HL = Hong Leong), sitting on 2x the cash of their market cap. That means for every $0.20 in share price, there is $0.40 cash + asset. For years, they refused to payout and one can only speculate that they will use the cash to buy inflated assets (hotels, properties) from their related companies.
They run it like family business, paid their extended family well in various departments. Then these highly-paid incompetent young leaders cocked up overseas and held the company back. I don't want to bad mouth them too much. A lot of issues.
Public companies shouldn't be like that.
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https://www.google.com/amp/s/simply...developments-sgxc09-using-too-much-debt-2/amp
Our View
While City Developments's level of total liabilities has us nervous. For example, its conversion of EBIT to free cash flow and EBIT growth rate give us some confidence in its ability to manage its debt. When we consider all the factors discussed, it seems to us that City Developments is taking some risks with its use of debt. So while that leverage does boost returns on equity, we wouldn't really want to see it increase from here. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately, every company can contain risks that exist outside of the balance sheet. These risks can be hard to spot. Every company has them, and we've spotted 3 warning signs for City Developments (of which 1 is potentially serious!) you should know about.At the end of the day, it's often better to focus on companies that are free from net debt. You can access our special list of such companies (all with a track record of profit growth). It's free.
https://www.google.com/amp/s/amp.sc...split-within-singapore-tycoon-kwek-leng-bengs
How CDL’s China expansion during Covid-19 led to a ‘shock’ split within Singapore tycoon Kwek Leng Beng’s family
- In Strictly Business: The Kwek Leng Beng Story, the Singaporean billionaire opens up on his six decades in business and the lessons he learnt through crises and challenges
- The book takes readers on a journey through Kwek’s business empire that spans several continents and sheds light on the negotiations behind key corporate deals
While CDL chairman Kwek Leng Beng had skipped through crises repeatedly with an unshakeable confidence that became a hallmark of his legend in the business world, he would find the triple whammy of the Covid-19, a partner’s meltdown and family problems a challenge almost too much to bear.
His Waterloo moment began when his son Sherman Kwek tried to expand CDL China. He found the pace much slower than expected. The group was growing at an average of a project a year. “We were late to enter the China market and only set up CDL China in 2010,” he said.
“We were growing very slowly there and my belief has always been that if you can’t achieve scale in a particular market segment or geography, then you will never be a major player or build any economies of scale. Without scale, even hiring people is immensely challenging. Nobody really knew CDL in China.”
His Waterloo moment began when his son Sherman Kwek tried to expand CDL China. He found the pace much slower than expected. The group was growing at an average of a project a year. “We were late to enter the China market and only set up CDL China in 2010,” he said.
“We were growing very slowly there and my belief has always been that if you can’t achieve scale in a particular market segment or geography, then you will never be a major player or build any economies of scale. Without scale, even hiring people is immensely challenging. Nobody really knew CDL in China.”
In 2018, he found a way to catapult CDL China to among the top developers in the country by taking a stake in Chinese developer Sincere Property Group, which was ranked among the top 100 real estate players.
From only three cities, CDL would suddenly be in 20 cities, with a pipeline of development projects in mostly Tier 1 and 2 cities. Sincere had a development land bank of 9.2 million square metres (99 million square feet) in gross floor area across 64 development projects spanning 18 cities in mainland China.
From only three cities, CDL would suddenly be in 20 cities, with a pipeline of development projects in mostly Tier 1 and 2 cities. Sincere had a development land bank of 9.2 million square metres (99 million square feet) in gross floor area across 64 development projects spanning 18 cities in mainland China.
In May 2019, CDL said it was taking a 24 per cent stake in Sincere for 5.5 billion yuan, or S$1.1 billion (US$820 million) then. It was CDL’s single largest investment in China to date.
Sherman Kwek said at the media briefing: “This transforms our company especially in China, where it was very painful for us for the last seven to eight years to buy one project at a time … Now we can seriously bulk up on scale and grow with our partner with the necessary expertise on the ground.
At the same time, CDL announced that Sherman Kwek was appointed to the board as an executive director, joining his father and his uncle Kwek Leng Peck.
Sherman Kwek said at the media briefing: “This transforms our company especially in China, where it was very painful for us for the last seven to eight years to buy one project at a time … Now we can seriously bulk up on scale and grow with our partner with the necessary expertise on the ground.
At the same time, CDL announced that Sherman Kwek was appointed to the board as an executive director, joining his father and his uncle Kwek Leng Peck.
It was going swimmingly for the young Kwek. “Being a Top 100 developer in China, Sincere would have been our key platform of growth there and I had plans to eventually rename it as CDL China,” he said.
“It would have turned us into a powerhouse in China, just like we are in Singapore. I was buying a platform with a sizeable land bank and a big team, and not just a bunch of assets. This is similar to how our group took over CDL when it was still loss-making. Obviously, the key difference is that Sincere was carrying a heavy debt load and needed to be deleveraged and restructured.”
As CDL conducted due diligence into Sincere, the Singaporeans discovered that the Chinese firm was in a worse financial state than they had expected. Like most developers in China, Sincere was heavily leveraged.
Its net gearing was already at 200 per cent in May 2019, and as China walked into the Covid-19 crisis in early 2020, Sincere got more desperate. Its debt load was S$6 billion.
“It would have turned us into a powerhouse in China, just like we are in Singapore. I was buying a platform with a sizeable land bank and a big team, and not just a bunch of assets. This is similar to how our group took over CDL when it was still loss-making. Obviously, the key difference is that Sincere was carrying a heavy debt load and needed to be deleveraged and restructured.”
As CDL conducted due diligence into Sincere, the Singaporeans discovered that the Chinese firm was in a worse financial state than they had expected. Like most developers in China, Sincere was heavily leveraged.
Its net gearing was already at 200 per cent in May 2019, and as China walked into the Covid-19 crisis in early 2020, Sincere got more desperate. Its debt load was S$6 billion.
Instead of being frightened off, Sherman Kwek saw an opportunity. He wanted to wrest control of Sincere at a better price than what was agreed in 2019. The 2019 deal was not completed as Sincere had not satisfied certain conditions. “I felt that we could save it and turn it around, then China would be one of our biggest markets,” he said.
He put forth a package for CDL to acquire 51.01 per cent, more than double the 2019 deal, at a cheaper price of 4.39 billion yuan. It also included a call option that CDL could exercise to buy an additional 9 per cent interest in the firm for 770 million yuan – the same valuation. Together, CDL would then hold a 60.01 per cent stake in the firm for a total of 5.16 billion yuan.
He put forth a package for CDL to acquire 51.01 per cent, more than double the 2019 deal, at a cheaper price of 4.39 billion yuan. It also included a call option that CDL could exercise to buy an additional 9 per cent interest in the firm for 770 million yuan – the same valuation. Together, CDL would then hold a 60.01 per cent stake in the firm for a total of 5.16 billion yuan.
In early 2020, this proposal was put to the CDL board for approval. The cracks became evident during the meeting – about three hours long, shared Sherman Kwek – when various concerned directors debated the issue vigorously. In the eight-person board, with Sherman Kwek choosing to abstain because he had proposed the project, it came down to a narrow vote in favour of acquiring Sincere.
In April 2020, the announcement was made. In a statement to the Singapore Exchange, CDL made clear it was taking advantage of a distressed sale, saying: “Given the adverse impact of the Covid-19 crisis and the global uncertainty, CDL has taken the opportunity to negotiate new terms for its investment into Sincere Property, which are significantly improved over the terms announced last year.”
Sherman Kwek said it was a “game-changing investment” and that he was very optimistic about the tie-up between CDL and Sincere. “1+1 can be bigger than 2,” he said.
But analysts quickly wondered aloud if CDL was “throwing good money after bad” since the deal was delayed and Sincere’s steep valuation discount.
Sherman Kwek said it was a “game-changing investment” and that he was very optimistic about the tie-up between CDL and Sincere. “1+1 can be bigger than 2,” he said.
But analysts quickly wondered aloud if CDL was “throwing good money after bad” since the deal was delayed and Sincere’s steep valuation discount.
To make matters worse, CDL was dealt an unforeseen blow by the Chinese authorities. In August 2020, China’s financial regulators introduced measures to rein in the highly-indebted developers – the likes of Sincere. In a move widely referred to as the “three red lines”, restrictions to cap borrowings by developers were further tightened, effectively making it near impossible for Sincere to turn around its fortunes unless there was a massive injection of funds.
By then, there was almost no chance of CDL putting in more money, director Philip Yeo said. “Without the three lines, we could have meandered through,” he said. “It reached the point when it was not possible to save Sincere.” The CDL board began to waver, with the thin majority about to give way.
By then, there was almost no chance of CDL putting in more money, director Philip Yeo said. “Without the three lines, we could have meandered through,” he said. “It reached the point when it was not possible to save Sincere.” The CDL board began to waver, with the thin majority about to give way.