GLP begun to repurchase its shares in the open market since its full year results on 19th May as its share price traded in the range between S$1.70 and S$1.95, and this has continued unabated with the latest transaction being as recent as 8th July. So far, the company has gone into the market on 35 occasions to purchase some 57.8m shares for S$104.1m, which translates to an average price of S$1.80 per share.

Given the group’s strong balance sheet with, on a pro-forma basis, US$2.0b cash and a look-through net debt to assets ratio of 24%, there is significant capital to deploy and we believe that these share buybacks are accretive to shareholders at currently undervalued share prices.

We continue to take a positive view on management team’s pragmatic and disciplined approach to capital allocation in current conditions, and continue to see long-term value in GLP’s shares.

Maintain BUY with an unchanged fair value estimate of S$2.37.

Source: OCBC Research - 11 Jul 2016