At 0.55 P/NAV, HBL trades at a bigger discount to large cap peer average (market capitalisation >SGD 1bn) of 0.84. We opine that interest in high-end properties is returning as the divergence in prices between Singapore’s and regional high-end property widens. The returning interest should narrow the P/NAV gap in HBL’s share price as the negativity towards the Group’s Sentosa Cove properties subsides. We maintain our ACCUMULATE call on Ho Bee Land with an unchanged RNAV-derived target price of S$2.64.
Figure 1: Average asking prices for HBL’s two main projects in Zhuhai and Shanghai rose substantially over the last few years
Figure 2: RNAV Table
Figure 3: Peer Comparison Table