B-WORK: Good Dividend Yield Makes an Attractive Investment

We have a BUY recommendation on B-WORK and slightly increase the target price to Bt13.90 from Bt12.80, implying an upside of 20% from the current share price. We derive our target price from a DCF-based valuation using a WACC of 7.1% and no terminal period.

Investment thesis:

• Group affiliation assures a high occupancy rate and stable revenue
• Impact from COVID-19 should be limited
• Addition of new assets offer upside to our target price
• Pays higher dividend yield than Thai peers

Interim: The 2Q20 results were in line with our expectations. The high occupancy rate ensures a fast recovery as soon as rental rates are back to normal.

Risks: Conflict of interest risk due to the largest unitholder and tenant being within the same conglomerate, rising bond yields, falling occupancy rate, and higher-than-expected renovation and overhaul costs.