GuocoLeisure

GuocoLeisure: CIMB initiated with a Buy rating and $1.20 TP, citing that UK’s strong economic recovery and booming tourism has brightened GuocoLeisure’s (GLL) outlook- likely to be a prime beneficiary of this trend, given its core hotel business in the UK. The new CEO of GLL’s hotel division endeavours to rebrand the company as an international entity. His strong track record- ex-CEO of Standard Chartered Global Consumer Bank, should aid to drive the transformation of GLL into a global hospitality entity and plans to have a presence in 100 cities by 2023. If successful, the plan would put GLL on the same playing field as global hotel operators like Hilton, Starwoods and Marriott. Further, the 2013 Guoco Group privatisation attempt ($1.25/share offer- 1x P/B) unveiled GLL’s deep discount to its RNAV, providing better clarity on the value of GLL’s property assets. The current discount to book (10%) and RNAV estimate (43%) may spur Mr Quek to again attempt to take GLL private.