"We expect the group to further strengthen its solid track record with the launch of four upcoming projects in its landbank," say the analysts.
They also see GuocoLand as well-positioned to capitalise on the flight-to-quality trend in the CBD Grade A office segment. Tight supply-demand dynamics continue to support near-full occupancies and positive rent reversions across its three prime office assets.
A potential catalyst for this stock, which has gained by nearly a third year to date but is still trading at around half its NAV, is the potential of restructuring to crystallise value.
"Given its growing portfolio of commercial assets, a potential conversion into a 'stapled security' could serve as a significant share price catalyst.
"Notably, management has indicated an openness to exploring monetisation opportunities at the right time to unlock further value from its portfolio," state Foo and Tan.
To value this stock, they have applied a 45% discount to their RNAV of $4.50, citing how this stock is relatively illiquid to its larger developer peers. Nonetheless, their previous discount was 50%.
The analysts say that their RNAV valuation has accounted for fair value estimates for its major investment properties and realisable values for its major development
projects, excluding China.
GuocoLand shares closed at $1.86 on Aug 29.
