Lim Kim Tah Holdings

Lim Kim Tah Holdings: Counter surged 14% yesterday after OSKDMG had a special situations report on it. Noting that a recent spate of privatizations in the property space highlight the latent value in commercial real estate landlords. Cite the ongoing privatization of Pan Pacific Hotels Group by UOL Group (9% premium to its last traded price), and Guthrie GTS (diversified co with real estate assets across the retail, residential and commercial sectors), which received a delisting offer from its major shareholders at a 21% premium to the last traded price as examples of the theme to continue. House think the eventual end game for Lee Kim Tah, which has evolved as a construction company into a property developer-cum-landlord, is a similar privatization offer from the founding Lee family. After many years of open market purchases, the Lee family today controls over 85% of the company, putting them within a whisker of the 90% shareholding level for delisting. Privatization angle aside, the stock is undervalued as its 50% stake in Jurong Point and 75% stake in the SIPCOT Information Technology Park township development in Chennai, is not adequately reflected in its books. The stock trades at 34% to house re-appraised net asset value of $1.28, and house have a TP of $1.02 based on a 20% discount to RNAV.