I was surprised to read that Mr Kwek Leng Beng, 84 years old, is still helming City Development Ltd ("CDL") as Executive Chairman- I would have retired at age 65 years old (if not 55 years old ideally) to enjoy my old age. Worst still, Mr Kwek Leng Beng has brought a lawsuit against his son, Mr Sherman Kwek, for attempting a coup and wanting to remove him as Group CEO of CDL. This seems surreal and something that only happens in Hong Kong TVB drama. As a result of the chaos, investors are jittery over the future of CDL.
1. Mysterious Woman That Caused the Rift Between Father and Son
Since ancient times, disputes between human beings have always revolved around 3 matters, namely, (i)Money; (ii) Power and (iii) Woman. Mr Sherman Kwek had mentioned that Dr Catherine Wu, who had a "long relationship" with his father Kwek Leng Beng, interfered in matters "well beyond her scope". The attempted removal of Dr Catherine Wu seems to be the main trigger of the current legal battle between father and son as per Mr Sherman Kwek.
Since ancient times, disputes between human beings have always revolved around 3 matters, namely, (i)Money; (ii) Power and (iii) Woman. Mr Sherman Kwek had mentioned that Dr Catherine Wu, who had a "long relationship" with his father Kwek Leng Beng, interfered in matters "well beyond her scope". The attempted removal of Dr Catherine Wu seems to be the main trigger of the current legal battle between father and son as per Mr Sherman Kwek.
2. CDL Share Price Disasterous Performance Over the past 5 years.
CDL's share price has been a disaster for the past 5 years which saw it plummenting from S$9.77 per share in February 2020 to the current S$5.12 per share as at 27 February 2025. Mr Kwek Leng Beng has mentioned disasterous foray into China property market which saw the group losing S$1.9 billion dollars as part of a series of missteps of Sherman Kwek. The elder Kwek pointed to past business decisions under his son's leadership that have "put CDL in a precarious position", including a S$1.9 billion loss from CDL's investment in Chinese developer Sincere Property in 2020 and poor returns from UK property ventures.
Parting Thoughts
Interestingly, CDL net assets per share as at last publised 2024 results is S$10.17 per share. Hence current market price is 50.3% off its NTA per share. If CDL's share price crash further due to the current legal fiasco, maybe it will present a good opportunity to acquire some CDL shares with additional safety buffer. Afterall, CDL is a long standing organisation with well functioning internal structures in place. Once the dust is off the board of directors infighting, CDL will be up and running as per normal.
It will be interesting when market open next week.
ReplyDeletethe NAV exclude their investment properties which are measured at cost less depreciation, same for their hotel assets which is classified as PPE.
Including this FV uplift, the RNAV is close to $20/share. Might worth a bet to buy if share price crash, after all these are all real hard assets..
$20 per share at fair value is almost 4 times its current mkt price. Since the 1.9 billion loss in China foray…..CDL share price never recover it seems.
Deleteget yr bullets all ready in cpf, cash, or srs to buy city dev
ReplyDeleteinfighting will result in third party especially temasek gic other overseas property comapies some glc blackrock eying hungrily on this jewel.
Hi Wai Chan, dun think the Kweks will sell it…..unless got severe crisis. CDL is a projection of their power base. They need a place to rule over common folks….else life becomes meaningless even if rich.
DeleteIts only 50% of compared to 80% off for HongkongLand. Which pays a decent dividend.
ReplyDeleteMy intial thesis is CDL will follow Capitaland and spin off the development arm, but that has gotten nowhere.
1.9B write off tells you all you need about new kwek's capability.
Old Kwek is 84.
So which side you choose? How about neither? GO hongkong land better.
Haha, yup….HK Land maybe better value indeed.
Delete