Iggy's Journal: UOB Kay Hian Puts an $11.85 Target on City Developments. Its Operating Profit Doesn't Cover the Interest Bill.

25 September 2026, Evening

Video Release

I keep coming back to one number on this one: 0.99 times interest coverage. CDL's RNAV story may well be real, but paper asset value doesn't pay an interest bill, and that's the gap between the target price and what the balance sheet is actually telling me right now.

The Numbers

UOB Kay Hian's $11.85 target depends on actual, fairly priced disposals happening, not simply on a strategic review headline being announced. The numbers underneath tell a harder story. Gearing sits at 69 percent, nearly double the 35 percent ceiling I use as a hard gate. Net debt to EBITDA is at 15.7 times, well past the 10 times mark I treat as a red flag. Interest coverage is 0.99 times, meaning operating profit doesn't fully cover the interest bill, and that's been compounded by two consecutive years of negative operating cash flow. The 3.83 percent yield clears my 3.2 percent forensic floor, but it misses the 4.7 percent hurdle by a meaningful margin.

My Personal Take

For a CPF, SRS, or dividend portfolio, this is exactly the kind of setup where a genuinely compelling growth story and a genuinely concerning balance sheet can both be true at the same time, and the second one doesn't go away just because the first one gets more airtime. The number I actually want to see next isn't another target price, it's the first signed disposal price measured against book value. That's the figure that tells you whether the RNAV story is real money or still just a plan. Full breakdown of how I'm weighing the target against the balance sheet is in today's video.

📺 Free YouTube: https://youtu.be/ELPnYvPW4no

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Not financial advice. Iggy's Forensic Compliance Standards apply.