She notes that GuocoLand's share price has gained 23% year to date but remains attractive at 0.5x to its RNAV. "Within the small-mid cap developer space, GuocoLand is our preferred pick, as its twin engines of growth continue to power earnings momentum," says Foo.
GuocoLand, under group CEO Cheng Hsing Yao, has maintained its equal focus on both development earnings from its steady pipeline of residential projects, and also recurring income from its portfolio of investment properties.
Foo estimates that GuocoLand is left with less than 5% of already launched projects not yet sold.
Meanwhile, it has two upcoming launches, River Modern and Tengah Garden, which Foo says will see "healthy" take-up.
The company will also enjoy near-term uplift in its recurring income base with the completion of the Lentor Modern mall, as well as better rental rates from its portfolio of Grade A offices.
Foo has raised her earnings forecast for FY2026 and FY2027 by 16 to 22%, to take into account lower financing costs.
She has revised her RNAV estimate to $5 from $4.50.
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Her new target price of $3.30 is pegged to a 35% discount of the higher RNAV.
For Foo, GuocoLand remains a "compelling" buy with multiple catalysts including strong sales of its residential launches, potential to give a higher dividend along with a stronger recurring income base, as well as potential value-unlocking if GuocoLand wants to do a REIT.
GuocoLand shares, as at 9.53 am, is down 1.49% to $2.64. It is up 80.82% in the past year.
