[Gstalk]

CDL sells Chinese unit for US$1 after US$1.4b write-off
Ishika Mookerjee


September 11, 2021 15:32 pm +08


(Sept 11): Singapore’s City Developments Ltd is selling its stake in Chongqing Sincere Yuanchuang Industry Co for US$1, as it ends the tumultuous backing of the cash-strapped Chinese developer.

The real estate group will sell a 63.75% equity interest in HCP Chongqing Property Development Co — which owns an 80.01% stake in Sincere, according to a statement published late Friday. The buyer is Sure Spread Ltd, an unrelated third party incorporated in the Republic of Seychelles.

City Developments, led by Chief Executive Officer Sherman Kwek, had already written down almost all of its S$1.9 billion (US$1.4 billion) investment in Chongqing Sincere. It acquired a majority stake in Sincere last April but the pandemic and China’s “three red lines” policy increased liquidity constraints at the unit, forcing losses on the broader Singaporean company.

[bobby]

[Niubee]

Let go losses is good news.

[starbugs]

Turns out the old bird directors were right to resign in protest.

[theold]

Some of them live in China. Their focus is there. Buy, build, develop and manage.

[revealer]

US$1/= for US$1.4b.  The fate of Chinese investment.  Will Capitaland suffer the same?  What about Singapore's investment.  cold liao.

[sgbuffett]

I had fond sentiment for this Citydev stock.

Becoz When I first started investing in shares listed in SGX in year 2000, I still remembered citydev was among the first group of shares that I bought 21 years ago in year 2000.

Now I am already a retiree.

That time in year 2000 when I bought citydev, the share price was about $6.50

There were a number of  blue chip property listed  stretching back 20yrs capitaland citydev and UOL.

Among these UOL is the best performer with stock price going up 400%

Capitaland stock price hardly changed returns mostlri comes from dividends.

Citydev performance is similar to capitaland. Price rose a bit after 20yrs.


This holds many lessons for investors learning to invest in property companies. 

The key is return of n capital. Both City Dev and Capitaland had a lot of news and activity in n property development ....but stock hard moved 20yrs ...all thansion funded by debt and the return on capital was low...it's like running on a treadmill...you have alot of activity but have little accumulation of value. ...no progress.

UOL is simple and low key  they owned prime property whose rental and valuation tripled during the same period....

In the end it's not all the activity and corporate development but whether the company can create and accumulate value.

You want to look for and buy stocks that have this 
Not distracted by alot of hype good news like Capitaland with so many projects expansion to so many countries but stock cannot go up. How many times we hear analyst rate Capitaland or CityDev as strong buy l a because of this project or that....20yrs later stock never moved. 

a

[p1acebo]

For the past 2 decades or so. I pumped in so much money into these s chips. Almost none did well. Luckily I sold some for profits before they all met with their untimely demise. Delistings and what other shenanigans blah blah blah.

While they will say serves you right and buyer beware, it also says a lot of SGX’s capability and oversight.

[sgbuffett]

you are wrong.

YZJ and Pfood are very good profitable S-chips that performed very well.

Actually, cosco also performed very well.

I remembered clearly I bought cosco at 24 cts in year 2002 and I collected many years of dividend and earned huge profits when I sold off cosco at $7 a few years later.

Some S-chips retarded haters often wrongly cite cosco as a lousy stock. But cosco is not a lousy stock, cosco all along at the beginning years was always hovering at 20 cts to 24 cts and later on when cosco surged to $8, really made a lot of cosco shareholders very rich if they take profits. Cosco NEVER plunged below it's IPO price even during great STI crashers. Even when STI crashed to 1450 points in March 2009, cosco was still resliently trading at above it's ipo price.

Cosco's share price movements is very similar to Citydev's share price movements, in the sense that both Cosco and Citydev started at low 20cts and around $6 when they first started respectively and both stocks got rose to a high of $8 and $17.90 respectively and now both stocks fell back to around their starting price of mid-20 cts and $6plus respectively but both stocks never crashed badly below their ipo starting prices

Can help me recall what happened to Pfood?

[talky]

city dev market cap is 6.07 b (fr google)
selling for $1 means the total investment of >$1b is all gone ?

[sclim]

aiya nothing new in the investment world. when a fund manager hit a bad investment. they
quickly sell and buried it. then move on. money can make back in other investment.
else the book will be stuck with lots of bad investment and investors will hesitate to invest in it.
if one make 100 invesetment all of equal size. win 70-80% of the time. net net the fund manager is a winner.

[starbugs]

In a normal listed company, the CEO would have been sacked, not the directors resign in protest. The son is just not capable.

[Blin]

https://youtu.be/YnjwnJscMbo

[sclim]

Let go losses is good news.

old horse knows the road la.
he is right about the invest but wrong about resign.
best if he can join the board again.
then cdl could easily regain in market cap more then the lost.