B-WORK: New Asset and Attractive Dividend Yield
SUMMARY
We maintain a BUY recommendation on B-WORK and increase the target price to Bt13.50 from Bt12.50, implying an upside of 35% from the current share price. We derive our target price from a DCF-based valuation using a WACC of 6.9% and a terminal growth rate of 2%.
Investment thesis:
- Group affiliation assures a high occupancy rate and secured revenue
- Almost unaffected by COVID-19, stable outlook
- Asset expansion unlocks further upside
- Higher dividend yield than peers, expect 7% in 2021-2022E
Interim: The 1Q21 results were in line with our expectations. The additional upcoming investment provides further upside.
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.
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