Fraser Centrepoint

Fraser Centrepoint: Following DBSV initiation highlighted yday, Daiwa also initiates at Buy with TP $1.84, pegged at 30% discount to SOTP. Likes that FCL mgt has shown astute reading of the local mkt over the past few yrs, focusing on the mass and mid tier segments where sales have been very strong. Believes shares of property developers have discounted the negative risks in the physical market and now offer strong value. FCL's discount of 44% to SOTP valuation of $2.62 is wider than that of other developers, even though FCL has pre-sold most of its projects under development and does not have a sizeable landbank in S'pore . Further 62.4% of its GAV is backed by commercial hospitality assets which provides good recurring income. TCC Group holds 87.9% stake in FCL and an eventual release of greater free float would draw more investor interest in FCL. The next phase of growth could also come from possible tie-ups with the TCC Group.