“Kwek Leng Peck’s return signals strong Kwek family support for CEO Sherman Kwek and management’s plans to execute CDL’s strategic review while improving operating performance and capital allocation,” the JP Morgan report says.
The recent win by an 80:20 JV between CDL and Hong Realty for the Newton GLS site signals greater alignment between CDL's management and the broader Hong Leong Group the report indicates. “This marks CDL’s first successful land bid with the Hong Leong Group in seven years since the 2019 Sims Drive GLS site, which became the Penrose project. CDL had also collaborated with Hong Leong Group in a 2022 Dunman Road GLS bid where the JV placed the second highest bid,” the June 16 report says.
In addition, CDL’s maiden share performance plan with a multi-year vesting, a six-year clawback and share-based non-executive director remuneration further strengthens shareholder alignment.
JP Morgan says its overweight rating is “underpinned by firmer family support for management's plans to improve operating performance and narrow the large discount to book via non-core sales, with detailed plans expected in the strategic review to be revealed in 3Q2026”.
See also: PhillipCapital raises target price for Zixin Group to 6 cents
Elsewhere, Goldman Sachs points out that the market underappreciates the 100-200 basis points (bps) ROE uplift potential over the next three years for CapitaLand Investment (CLI), Keppel, and Hongkong Land (HKL) as they pivot toward fee-based, asset-light fund management models.
“Drawing on Brookfield’s historical playbook, we expect the focus to shift from NAV-based to earnings-based valuations as fee-related earnings grow, potentially driving a 20-60% expansion in price-to-book multiples. We are Buy rated on all three names, with 12-month target prices of $13.10 for Keppel, $3.27 for CLI, and US$11.20 for HKL, driven by distinct catalysts including infrastructure exposure, capital recycling, and the Hong Kong office upcycle,” Goldman Sachs says.
