In a report released yesterday, Rachel Tan from DBS maintained a Buy rating on Frasers Property (FSRPF – Research Report), with a price target of S$1.20.
Rachel Tan has given her Buy rating due to a combination of factors which suggest that Frasers Property Limited (FPL) is notably undervalued in the market. She points out that the company’s shares are trading at a significant discount, with the market failing to recognize the value of its diverse operations. Specifically, Tan highlights that Frasers Property’s stakes in various Real Estate Investment Trusts (REITs) are worth more than the company’s market capitalization, indicating a mismatch in valuation. Moreover, she believes that the company’s established record in residential development and its international industrial and logistics platform, as well as its burgeoning hospitality segment, are not being adequately priced in by the market.
Tan’s optimism extends to the anticipated earnings recovery in FY24F, propelled by increased revenue recognition from development projects and stable returns from its industrial and logistics properties. The company’s strategy of active capital recycling to its REITs is seen as a move to optimize its capital structure, which along with the potential for improved dividends from higher profitability, presents an attractive investment case. Additionally, Tan notes that Frasers Property trades at record low valuations, making it a prime candidate for privatisation, and emphasizes that despite the headwinds of a global economic slowdown, the company’s diversified and resilient portfolio positions it well for the future.
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Frasers Property (FSRPF) Company Description:
Frasers Property Ltd owns, develops and manages a diverse, integrated portfolio of properties. Its assets range from residential, retail, commercial and business parks, to industrial and logistics in Singapore, Australia, Europe, China, and Southeast Asia.
