The group's business model is rooted in space optimisation, which it had carved its niche in. This segment, apart from running the co-living business, provides spaces for commercial, industrial uses and storage facilities under its Work + Store business. The segment remains core to LHN's operations, contributing to about 70% of the overall group’s revenue.
LHN also provides integrated facilities management services and manages over 100 car parks in Singapore. This represents about 29% of the group's revenue.
The company has also expanded to other Asia regions in Cambodia, Myanmar and Indonesia with residential & office spaces.
The way the analysts see it, the group's Coliwoo business is currently worth about $246 million and that should rerate its share price to about 81 cents per share. Also, the group has announced plans for the spin-off of its co-living business Coliwoo while maintaining its status as the majority shareholder in the business.
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To recap, the group had successfully spin-off and listed its logistics arm, LHN Logistics back in 2022 and delisted in 2024 due to a privatisation offer from Shanghai-listed Milky Way Chemical Supply Chain Service. LHN Logistics listed at an IPO price of 20 cents per share and delisted at 22.66 cents per share.
Currently, Coliwoo is the market leader in Singapore’s fast growing co-living residential lodging segment, with about 25% market share, and is expected to grow by another 800 keys per year for the next two years. Based on our estimates, Coliwoo could be worth up to $187 million to $246 million based on FY2025/FY2026 P/E multiple, translating to a per share value of about 45 cents to 60 cents. The analysts believe that this has yet to be fully priced into the stock.
"Our fair value for the group, based on FY2025 estimates, is 81 cents per share based on a 13x P/E on Coliwoo’s FY2025 earnings and a 10x P/E on its existing business. The proposed spin-off will give Coliwoo the gunpowder to stretch its asset-light model further and continue growth in Singapore through its unique model of asset repurposing and master leases," say the analysts.
As at 3.20pm, shares in LHN are trading at 64 cents.
