DBS started Frasers Property Thailand at Buy with a 22.30 baht (S$0.97) target price, saying it’s the “best time ever” to acquire the shares.
“Having been hit by huge oversupply and weak demand in the past several years, the factory and warehouse industries have bottomed out and now on the early stage of an upcycle,” DBS said in a note earlier this week.
Thailand’s industrial property market may also benefit as Chinese investors relocate to the country to avoid U.S. import tariffs related to the trade war with China, the note said.
In addition, the planned offer for Golden Land is a “key positive” for its immediate boost to earnings and an immediate diversification of revenue, DBS said.
“The acquisition of GOLD will help diversify its portfolio from currently industrial-property-centric company to a more diversified and integrated company with industrial, residential, commercial, hospitality, and property management businesses,” DBS said.
“This should help diversify risks from relying solely on any particular industry, and thus improve the quality of its revenue and earnings,” the bank added.
DBS noted some of the assets could be injected into REITs, which would both unlock value and result in divestment gains which can be used for expansion.
FPT is now 89.47 percent owned by Frasers Property, DBS said.
The stock was at 18.00 baht, down 0.55 percent, in midday trade Friday.
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