TJDaRenTang USD (T14.SG)
At current levels (T14 US$3.08, A-share 600329 at RMB49.12),
the A-share trades at a P/E of 10.57x while the Singapore listing trades at
just 4.72x—a significant valuation discount. Taking the midpoint between these
two valuations, the fair value for T14 should be around US$5.00, representing
upside potential of 62%.
The stock offers a reliable dividend
yield of at least 5%, providing attractive income while waiting for the market
to recognize its undervaluation.
The substantial valuation gap between the dual listings suggests Singapore
investors are overlooking the company's fundamentals, creating an arbitrage
opportunity.
Key risks include potential regulatory changes affecting
dual-listed stocks, liquidity constraints in the Singapore market that could
delay price discovery, and any deterioration in the company's A-share
performance that might justify the current discount. However, the extreme
valuation gap appears difficult to justify based on fundamentals alone.
The dual-listing discount presents a compelling value
opportunity. With a 5%+ dividend yield providing downside protection and
earnings support from the A-share market, investors can patiently wait for Mr
Market to close the valuation gap and push T14 toward its fair value of US$5 or
above. This offers both income and capital appreciation potential with a
reasonable margin of safety.
Superphang
https://superphang.blogspot.com
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