B-WORK: Offers Price Upside and a Good Dividend Yield

331 Views14 Aug 2020 09:37
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SUMMARY

We initiate coverage on B-WORK with a BUY recommendation based on a target price of Bt12.80, implying an upside of 13% 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

Risks: Conflict of interest 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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