The low valuations could be due to Tuan Sing’s high net debt-to-equity and low interest coverage ratio.
Nevertheless, DBS reckons the company's share price may have yet to fully price in the completion of the Robinson Point sale and may appreciate further once the deal is confirmed.
Moreover, GulTech – the company’s printed circuit board manufacturing arm – looks set to continue riding the semiconductor upcycle.
A recovery in the company’s Australian hospitality business may be also on the cards as the Covid-19 crisis there subsides.
“Trading at 0.3 times net asset value, we continue to see good value in the stock,” DBS analyst Derek Tan and the research team write in a note dated Sept 15.
As at 12.11 pm, Tuan Sing was up 1 cent or 3.4% at 30.5 cents with 409,000 shares changed hands.
