Ho Bee

Ho Bee: CIMB maintains ADD with $2.43 TP. The house notes that, Ho Bee has successfully shifted towards being an office landlord with The Metropolis making up 57% of its GAV. While unsold units in Singapore and China pose risks to its valuation, current price discounts them completely, unjustified in house view. Maintain Add rating on improved recurring rental income and attractive valuation. TP is still still based on a 30% discount to RNAV) dips 3.6% as it roll forward valuation basis and factor in lower ASPs for developments. FY13-15 EPS drops 26-62% as the house adjust for lower ASPs for Sentosa units and delays in earnings recognition. Potential catalysts include surprises in office rentals and property sales.