ALL: Undemanding Valuation and Good Growth Prospects in Shunned Sector

We initiate coverage on ALL with a BUY recommendation based on a target price of Bt4.39, implying an upside of 25% from the current price. We derive our target price from a 20% discount to the PE ratio of Asia ex Japan Real Estate, and apply a 15% small-cap discount.

Investment thesis:

• Recent investment in shopping mall diversifies revenue stream
• Partnership with Japanese firms as a gateway to efficient residential development
• Pipeline residential projects ensure constant near-term growth

Risks: Increased competition and slowdown in demand for residences, rising land and construction costs, delayed construction and transfer of projects, access to capital.