Ho Bee Investment (HOBEE SP, H13)
Target Price: S$2.45
We continue to like Ho Bee for three main reasons.
First, management noted that preleasing activity for the upcoming The Metropolis has been strong, with leasing negotiations in advanced stages for major tenants; it expects about 50% of the space to be leased by the beginning of this year.
Second, management has also been actively buying back shares in the last two years with recent buybacks done at S$1.935, signaling deep value despite a share price run-up.
Third, we see potential upside to its dividend payout after realising a net gain of about S$50m from asset disposals last year. Maintain BUY and target price of S$2.45, pegged at a 20% discount to our RNAV of S$3.06/share.
Technically, the stock is likely to trend lower after failing to close above S$2.00 after the selloff on 14 Jan 13. Watch for S$1.72/1.66 should prices continue to head south.
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