DBS Group research analyst Derek Tan is predicting a re-rating of real estate firm Tuan Sing Holdings following the $500 million sale of its Robinson Point property. With most of the proceeds intended for debt servicing, the counter’s potentially lower gearing ratio could see investors taking a second look. 

“Given that at least $290 million of proceeds will be used to pay off borrowings, we estimate that net debt-equity could improve to 0.90 post-deal from the current 1.37. We opine that a key overhang on Tuan Sing’s share price has been its high gearing that resulted in the stock trading at a P/NAV of 0.3, a discount to peers’ average of 0.5,” says Tan. 

He has maintained his “buy” call on the counter with a higher target price of 44 cents from the previous 38 cents.

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