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Broker's take: Value creation for Tee Land from associate firm's Thai listing: KGI

THE listing of Tee Land's associate company Chewathai in Thailand has created value for the Singapore-listed developer.

Yet, the successful listing appears to have gone unnoticed in the Singapore stock market, with light trading in the stock, said KGI Fraser Securities.

Tee Land had a 49 per cent stake in Chewathai, a Thai real estate developer which builds condominiums and operates factories for rent.

Chewathai made its debut on the Stock Exchange of Thailand on April 5 with an initial public offering (IPO) price of 1.60 baht a share, giving it a market capitalisation of about 1.2 billion baht (S$47 million).

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While Tee Land's stake in Chewathai falls to 31.88 per cent after the IPO, this is valued at 383 million baht - 13.6 per cent more than the value of its pre-IPO stake, noted KGI analyst Wong Hong Wei.

He also observed that Thai developers usually trade above book value, unlike Singapore developers which trade at a large discount.

"With the poor outlook on the Singapore residential property market, Chewathai allows Tee Land to diversify into the Thailand market. In the future, Chewathai may shift its focus to low-rise housing, which ensures more stable income," he said.

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