Is global growth on the cards for CityDev?

Its overseas exposure sits at 45% of total assets.

City Developments (CityDev) has transformed right under the market’s nose, as the company has become a global player geared for growth.

According to a report by OCBC, over the last three years, CityDev’s overseas exposure jumped to 45% of total assets from 36% as at end 2012, with a strategic focus on growth in key markets such as China, UK and Japan.

In addition, 71% the group’s earnings before interest, tax, dividends and amortisation (EBITDA) and 51% of total assets were attributable to recurring profit divisions as end 2015.

Further, CityDev’s pockets are deep enough for management to enact its global growth strategy. 

The company sits on a robust balance sheet with a low 26% net gearing, as well as a cash balance of $3.6b as at end 2015. Further, CityDev has exhibited a capacity to recycle capital from its stabilized assets through its private funds platform. This will further boost CityDev’s growth ahead as it structurally re-deploys capital into higher return global projects.

For instance, in December 2014 and December 2015, CityDev clinched a $1.5b and $1.1b of cashflow syndication of its mixed use and office assets respectively under its profit participation securities platform.

“CityDev shares are currently trading at a significant 29% discount to our RNAV estimate and we see long term fundamental value at present prices, particularly as we expect management to continue making headway in its capital recycling and growth strategy in FY16,” OCBC stated.