Excerpts from DBS report

Analysts: Woon Bing Yong & Derek Tan

Raising TP as Gultech IPO progresses

INVESTMENT THESIS
Key Arguments:

• Potential IPO of GulTech to crystallise hidden value.

Tuan Sing 

Share price: 
$0.46

Target: 
$0.66

Since our initiation back in June 2020, Tuan Sing’s share price has risen 132% and we still see upside with a few catalysts ahead.

The sale of a stake in GulTech to strategic partners is projected to bring in substantial returns while sales at its residential projects could deleverage its balance sheet to a more conservative 0.6x by FY22, in our estimates.

As the potential IPO nears, we raise our TP to S$0.66 as we repeg our valuation multiple for GulTech to 16x FY22F PE, still a conservative valuation considering GulTech’s peers trade at over 20x FY22F PE.

PCB gultech• Transformation into partial tech play in progress. GulTech’s earnings have grown by a CAGR of 17.7% in the past five years.

While Tuan Sing’s effective interest in GulTech Jiangsu will fall to an estimated c.38% after the divestment to the strategic partners, GulTech’s earnings growth may accelerate with help from its partners.

• Resilient property market. The Singapore private property market has held up well amid the pandemic, and a successful sales launch of Peak Residence could catalyse share price.

SOTP Valuation
Our SOTP share price of S$0.66 was based on a combination of RNAV valuation and relative valuation.

You may also be interested in:


You have no rights to post comments

Counter NameLastChange
AEM Holdings3.230-0.040
Avi-Tech Electronics0.245-0.005
Best World1.690-0.030
Broadway Ind0.090-
China Sunsine0.395-0.005
ComfortDelGro1.330-0.010
Delfi Limited1.130-
Food Empire1.1100.020
Fortress Minerals0.310-
Geo Energy Res0.280-0.005
GSS Energy0.028-
Hong Leong Finance2.480-
Hongkong Land (USD)3.260-0.020
InnoTek0.400-
ISDN Holdings0.330-0.005
ISOTeam0.041-
IX Biopharma0.0430.001
Jiutian Chemical0.024-0.001
KSH Holdings0.300-
Leader Env0.052-0.003
Medtecs Intl0.152-
Nordic Group0.400-
Oxley Holdings0.098-0.002
REX International0.162-0.004
Riverstone0.605-0.010
Sinostar PEC0.125-
Southern Alliance Mining0.670-
Straco Corp.0.475-
Sunpower Group0.240-
The Trendlines0.090-
Totm Technologies0.038-
Uni-Asia Group0.905-
Wilmar Intl3.540-0.030
Yangzijiang Shipbldg1.470-0.020
 

We have 2174 guests and no members online

rss_2 NextInsight - Latest News