Thursday, April 19, 2012

Boustead Holdings Bhd : Undervalued High Growth Stock in KLSE

Prelude To Jalan Cochrane Development?

§ Boustead formed a 50:50 JV with Ikano (owner of IKEA in ASEAN) to acquire land from LTAT for development of a shopping mall in KL.
§ Despite lack of details, we suspect the land is part of the strategically located 60 acres in Jalan Cochrane (JC).
§ The parties are joining forces again to replicate the success story of Mutiara Damansara and this could be a prelude to the long-awaited full scale development and asset injection of the JC land.
§ Recent newsflow reaffirms our positive view on the company as the anticipated catalysts for share price performance are gradually materializing.
§ Forecasts unchanged pending more details.
§ Maintain Buy.
§ Target price maintained at RM6.45 based on Gordon Growth (ROE of 13.7% and WACC of 10.5%.

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