Quantify, be ambitious: Time for CDL, UOL to unveil plans to further boost share price

[SINGAPORE] Amid a revival of interest in Singapore stocks and resilience in the Republic’s property market, shares of City Developments Ltd (CDL) and UOL Group have rallied strongly since mid-2025, though some gains have been erased by the conflict in the Middle East.

Both CDL and UOL are active in property development, property investment and hospitality, and are constituents of the benchmark Straits Times Index. The duo delivered solid results for financial year 2025.  

Helped primarily by strong capital recycling gains and robust residential property sales in Singapore, CDL posted net profit of S$629.7 million, up 213 per cent on the year. For the full year, dividend per share (DPS) was S$0.28, versus S$0.10 for FY2024.

Driven by strong performance from property development and investment, UOL recorded net profit of S$481.7 million for FY2025, up 34 per cent year on year.

Shareholders were rewarded with a special dividend of S$0.07 a share, on top of a first and final dividend of S$0.18 a share for the full year.

Book value discounts

Still, CDL and UOL trade below book value.

As at Tuesday (May 19), CDL’s share price was S$8.22, representing a 23 per cent discount to its end-2025 net asset value (NAV) per share of S$10.74.

It is also a larger discount of 54 per cent to the restated NAV per share of S$17.99 with fair value of investment properties included.

And including the fair value of investment properties and hotels, the share price is a 59 per cent discount to the restated NAV per share of S$20.16.

Likely, the restated NAV per share of S$20.16 is still conservative as this excludes potential profit from residential property development.

Meanwhile, UOL’s share price of S$10.17 as at May 19 represents a 27 per cent discount to its end-2025 NAV per share of S$13.92.

The company recognises fair value on investment properties as determined by independent professional valuers. However, the surplus on valuation of hotel properties amounting to S$1.8 billion as at end-2025 was not incorporated in its financial statements.

CDL and UOL should urgently unveil ambitious strategic plans with quantifiable targets to drive further share price improvement and close the valuation gap with what the groups are truly worth.

CDL has engaged global advisory firm Teneo to conduct a review of its strategy and operations, and expects to announce the outcome of the review by June. 

Might unveiling new strategic plans that get buy-in from investors be another feather in the cap of octogenarian executive chairman Kwek Leng Beng?

Hongkong Land’s template

What Hongkong Land unveiled in its strategy update in October 2024 can serve as a useful guide to CDL and UOL.

Despite having significant exposures to the struggling property markets of Hong Kong and mainland China, the company’s share price has more than doubled since unveiling its new strategy. 

Hongkong Land set out to double underlying profit before interest and tax, double DPS, recycle capital of up to US$10 billion, and grow assets under management (AUM) to US$100 billion with active participation by third-party capital by 2035.

By growing the business through development and management fees, the group aims to boost return on equity (ROE).

It has made progress in executing its strategy. For example, it exited the property development business in Singapore and Malaysia with the sale of MCL Land to Sunway Group. 

Earlier this year, Hongkong Land established its inaugural private real estate fund, the Singapore Central Private Real Estate Fund, with Qatar Investment Authority and APG Asset Management as founding investors.

Hongkong Land manages this fund, the assets of which include properties that the group injected.

Based on the company’s latest annual report, total share buyback invested until end-February 2026 amounted to more than US$330 million, thereby reducing issued share capital by 2.4 per cent.

The group has since continued to repurchase shares. 

Driving ROE

While CDL and UOL achieved significantly higher ROE in 2025 from the year before, their ROEs of 6.6 per cent and 4.1 per cent, respectively, are unexciting.

Both groups could use their investment properties to establish private real estate funds and/or listed real estate investment trusts to leverage third-party capital for growing AUM and earning recurring fee-based income.

Such a strategy will help drive higher ROE on a sustainable basis.

Perhaps the duo can do more in portfolio recycling, especially by exiting underperforming businesses as well as being more investor-friendly through robust capital management.

Actively buying back shares may help, too.

UOL could consider taking its listed subsidiary Singapore Land Group private to enhance operational flexibility and achieve cost savings.

It could also divest its substantial holdings of financial assets, which include investments in UOB and Haw Par Corporation . UOL’s balance sheet as at end-2025 included financial assets worth over S$1.5 billion.

Might selling stakes in a bank and a diversified group with a strong presence in consumer healthcare be optimal for UOL?

CDL and UOL are sharp in execution on property development and management of investment properties in Singapore. Both groups have built sizeable hospitality portfolios and strong hotel management capabilities.

Despite share price rallies, CDL and UOL are deeply undervalued. The board of directors and management of these two leading businesses should set out strategic plans that help optimise returns for shareholders expeditiously.

CDL and UOL can unleash the animal spirits of investors by unveiling bold plans which strengthen their investment stories. 

The writer owns shares in CDL and UOL