Hafary

Hafary: UOB Kay Hian initiates Coverage with Buy Call and $0.66 TP. House note that strong construction demand is likely to boost future earnings and grp's valuation is backed by a portfolio of industrial buildings held at low cost on balance sheet. Any plans to unlock hidden value of the property portfolio may be an upside catalyst for the stock. Hafary currently owns four leasehold properties that are held at cost on balance sheet. Using valuations based on recent resale transactions, derived a fair value of $60.2m for Hafary’s four leasehold properties. The derived fair value is $13.8m($0.06/share) higher than the book value in its balance sheet. A near-term upside catalyst may emerge if Hafary enters into a sales-and-leaseback agreement or a direct sale that could unlock the hidden value of its industrial properties. Technically, the stock appears to be supported near $0.40 and could trend higher towards $0.55/0.58. House had a technical buy on 26 Mar 13 with a target price of $0.55.