SINGAPORE (Dec 16): UOB Kay Hian is initiating coverage of Rex International Holding (Rex) with a "buy" and a target price of $0.218, or 1.1 times 2020 book value.

That's because Rex has proven its ability to create substantial value from the recent sale of two Norwegian assets for US$45 million ($61 million), realising a gain of around US$30 million.

In Norway, Rex still owns three assets which are worth an estimated US$20.7 million on its balance sheet. If oil is discovered, the Norwegian assets could be worth a lot more than its estimated current book value, says analyst Llelleythan Tan in a recent report.

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