Allco – CSFB
ALLCO, csfb remains OUTPERFORM with target price $1.45
– We assume coverage of ALLC with OUTPERFORM, TP S$1.45 (47.2% potential upside). We have revised the previous target price by 2.1% from S$1.42.
– ALLC will see 25.0% of its total lease expiries in 2008, led by SG and AU markets, where we see upside from rental reversions. Re- negotiations of Japanese leases in the next 1-2 years during renewals present an opportunity for potential conversion of traditional leases to fixed-term leases.
– ALLC has made seven acquisitions and tripled its portfolio value since listing. We believe that its increasing traction on acquisitions and diversification into new markets reflects management.s execution capabilities and flexibility to acquire in strategic markets. ALLC is also one of the most tax efficient REIT, allowing it to enjoy greater opportunities in target markets.
– ALLC is currently trading at a discount of 40.3% to NAV, which we believe is too steep and unjustified given its significant growth through acquisitions which has been overlooked.
– ALLC has made seven acquisitions and tripled its portfolio value since listing. We believe that its increasing traction on acquisitions and diversification into new markets reflects management.s execution capabilities and flexibility to acquire in strategic markets. ALLC is also one of the most tax efficient REIT, allowing it to enjoy greater opportunities in target markets.
– ALLC is currently trading at a discount of 40.3% to NAV, which we believe is too steep and unjustified given its significant growth through acquisitions which has been overlooked.