UK's strong economic recovery and booming tourism has brightened GuocoLeisure's (GLL) outlook. The new CEO of GLL's hotel division endeavours to rebrand the company as an international entity. The attempt to take private GLL's parent company, Guoco Group, in 2013 has provided better clarity on the value of GLL's property assets.
UK's strong economic recovery and favourable hotel sector dynamics in the UK signals a brighter outlook for GLL. The new CEO of the hospitality division, Mr Mike DeNoma, intends to turn UK-focused GLL into a global hotel operator. The 2013 Guoco Group privatisation attempt unveiled GLL's deep discount to its RNAV. We initiate coverage on GLL with an Add rating and target price of S$1.20 (at 30% discount to CY14 RNAV).
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