DBS Group Research has maintained its "buy" call and $2 target price on GuocoLand following the developer's 1HFY2025 results, which came in ahead of estimates.
For the six months ended Dec 31 2024, GuocoLand reported earnings of $74.6 million, up 13% y-o-y, led by its property investment business.
DBS observes that the company's Singapore commercial assets continue to maintain high occupancy rates and positive rental reversions.
Both Guoco Tower and Guoco Midtown maintained 100% occupancy rates, while 20 Collyer Quay managed to hold at 96%.
DBS is also positive on the company's strategy of active land banking in Singapore, given its "solid track record" in property development.
GuocoLand, together with its partners, has five sites in its inventory: Lentor Central, Upper Thomson Road, Margeret Drive, Faber Walk and Tengah Garden Avenue.
"Yet, it remains eager for more land and emerged as the top bidder in its independent bid for the River Valley Green (Parcel B) GLS tender last Friday," observes DBS.
The company has achieved "robust" sales of its launched projects, with Midtown Modern and Lentor Modern fully sold, followed by Lentor Hills Residences and Lentor Mansion 99% and 91% taken up respectively, whereas Midtown Bay is 63% spoken for.
As at Dec 31, GuocoLand's net asset value per share increased slightly to $3.91, from $3.90 as of June 30.
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At current levels, GuocoLand's share price trades at 0.4x P/B and more than 4% forward yield, offering "compelling value" to investors, says DBS.
Catalysts for the stock include strong sales for its residential project launches in Singapore as well as potential re-structuring of its assets into a stapled security or REIT.
GuocoLand shares changed hands at $1.45 as at 3.58 pm, up 0.69% for the day.
