Excerpts from DBS report

Analysts: Woon Bing Yong & Derek Tan

Raising TP as Gultech IPO progresses

INVESTMENT THESIS
Key Arguments:

• Potential IPO of GulTech to crystallise hidden value.

Tuan Sing 

Share price: 
$0.46

Target: 
$0.66

Since our initiation back in June 2020, Tuan Sing’s share price has risen 132% and we still see upside with a few catalysts ahead.

The sale of a stake in GulTech to strategic partners is projected to bring in substantial returns while sales at its residential projects could deleverage its balance sheet to a more conservative 0.6x by FY22, in our estimates.

As the potential IPO nears, we raise our TP to S$0.66 as we repeg our valuation multiple for GulTech to 16x FY22F PE, still a conservative valuation considering GulTech’s peers trade at over 20x FY22F PE.

PCB gultech• Transformation into partial tech play in progress. GulTech’s earnings have grown by a CAGR of 17.7% in the past five years.

While Tuan Sing’s effective interest in GulTech Jiangsu will fall to an estimated c.38% after the divestment to the strategic partners, GulTech’s earnings growth may accelerate with help from its partners.

• Resilient property market. The Singapore private property market has held up well amid the pandemic, and a successful sales launch of Peak Residence could catalyse share price.

SOTP Valuation
Our SOTP share price of S$0.66 was based on a combination of RNAV valuation and relative valuation.


Share Prices

Counter NameLastChange
AEM Holdings3.7300.080
Avi-Tech Electronics0.275-0.015
Best World1.790-0.010
Broadway Ind0.1190.002
China Sunsine0.410-
DISA0.003-
Food Empire0.6500.030
Fortress Minerals0.345-
Geo Energy Res0.3550.005
Golden Energy0.7750.005
GSS Energy0.047-
InnoTek0.4750.025
ISDN Holdings0.4050.010
ISOTeam0.095-
IX Biopharma0.127-
Jiutian Chemical0.0760.001
KSH Holdings0.355-
Leader Env0.053-0.007
Medtecs Intl0.147-0.001
Meta Health0.0250.001
Nordic Group0.475-
Oxley Holdings0.1450.001
REX International0.2350.005
Riverstone0.6250.025
Sinostar PEC0.191-
Southern Alliance Mining0.405-
Straco Corp.0.405-
Sunpower Group0.255-
The Trendlines0.0940.001
Totm Technologies0.110-0.004
UG Healthcare0.1990.001
Uni-Asia Group0.8150.015
Wilmar Intl4.0900.030
Yangzijiang Shipbldg1.390-0.020

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