SINGAPORE (April 26): OCBC Investment Research is keeping City Developments (CDL) at “buy” and raising its fair value estimate to $9.89 from $8.67 to reflect the strengthened business profile of the group.

In a Tuesday report, lead analyst Eli Lee says CDL’s “expedient evolution into a global growth player over the last three years has been under-appreciated by the market”.

At end 2015, CDL’s overseas exposure increased to 45% of total assets – with a strategic focus on growth in key markets China, UK and Japan – compared to 36% at end 2012.

OCBC notes CDL has significant financial resources to back its global growth strategy. The group sits on a robust balance sheet with a low 26% net gearing and a cash balance of $3.6 billion as at end 2015.

CDL has also the demonstrated capacity to recycle capital from its stabilised assets through its private funds platform, which will add wings to further growth ahead as it structurally re-deploys capital into higher return global projects.

“CDL shares are currently trading at a significant 29% discount to our RNAV estimate and we see long term fundamental value at present prices,” says Lee.

At 12.26pm, CDL is down 2.64% at $8.48.