ALL: Valuation Remains Undemanding, Expect Further Upside
We have a BUY recommendation on ALL based on a target price of Bt4.39, implying an upside of 31% 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
Interim: Although the real estate sector is severely affected by the COVID-19 pandemic, ALL has delivered strong results. The high backlog of projects and demand recovery for residential projects should unlock further upside potential.
Risks: Increased competition and slowdown in demand for residences, rising land and construction costs, delayed construction and transfer of projects, access to capital.
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