Nomura has cut its target price for Singapore property developer Keppel Land (KLAN.SI) to $5.19 from $5.56 and kept its rating at buy.
Nomura said it has placed a 45% discount, versus none previously, on Keppel Land’s property development business in China to reflect the market’s challenging near-term outlook.
“Besides policy concerns, supply is a significant overhang on home prices, especially in the prime luxury segment in the near term. Against this physical market outlook, residential developers are unlikely to outperform,” said Nomura in a report.
The brokerage noted that the overall residential property market in China appears weak following recent cooling measures by the government, and Keppel Land’s management expects sentiment to remain soft in the near term.
Keppel Land has property projects in Chengdu and Tianjin Eco City in China.
At 11:12 a.m., shares of Keppel Land were 0.25% higher at $3.98, and have fallen 17% since the start of the year.
