CIMB Research raised its target price on property developer Ho Bee Investment Ltd to S$2.21 from S$1.93 and kept its ‘outperform’ rating, citing a possible upward revaluation of its assets.
Ho Bee shares were up 1.1 percent at S$1.885, and have jumped 83.9 percent since the start of the year, compared with a 36.6 percent rise in the FTSE ST Financial index.
Ho Bee is trading at a 30 percent discount to its book value, but CIMB noted that “the discount gap is attractive as its book value is set to rise next year,” when its commercial property, the Metropolis is revalued.
“Demand for investment assets and quality office properties with large floor plates places Metropolis in good stead for a potential divestment in 2013,” said CIMB.
The launch of China projects will also boost profits from developments sales, CIMB said, expecting a sell-through rate of 50 percent to 60 percent for initial launches.