In his view, Bukit Sembawang is now attractively priced at a 42% discount to RNAV, which is significantly larger than the 14% trading discounts of the stock’s large-cap peers despite its prospects of stronger returns – and hence “excessive” considering the group’s net cash of $236 million and FY19E ROE of 14%.
SINGAPORE (Dec 14): Maybank Kim Eng Research is initiating coverage on Bukit Sembawang Estates at “buy” with a target price of $8.25, at a 20% discount to the research house’s RNAV of $10.31, on expectations of a cyclical earnings rebound in FY19/20E to reverse its earnings contractions over the past six years.
In a Wednesday report, analyst Derrick Heng identifies the stock as a concentrated proxy for Singapore’s residential market which he believes is at an inflection point after four years of price falls.
