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شركة اعمار العقارية
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Opening the black box
• Since the focal rationale, we feel, is to gain access to shut capital markets, a sensible scenario is a merger followed by a right issue.
• A swap ratio of 1:1 implying a c65% discount to the merger entities’ NAV would be value accretive to investors.
• We initiate on Emaar with a TP of AED 6.5 per share, implying a total potential return of 34%.
Although appetite in Emaar has improved of late (foreign ownership up from 5.2% in July 2009 to 7.3% in October 2009), investors remain cautious about the terms of the merger. While these concerns are valid, we feel that they are overstated, considering that (1) the process is being overlooked by ESCA to insure fair representation of both sides, (2) any overvaluation of assets would lead to future impairments, (3) since the future prosperity of the Dubai economy rides on its ability to attract foreign funds, it is likely to continue to follow an investor friendly policy, and, more importantly, (4) we do not see any obvious benefits to the contrary. An exodus foreign funds would leave those with the largest stake most exposed.
We initiate on Emaar with a Buy recommendation and a Target Price (TP) of AED 6.5 per share, suggesting a total potential return of 34%. We value real estate companies using a combination of DCF. Otherwise, we use land valuation only. To be conservative, at this stage we exclude future projects from our model until further clarity. We value Emaar at a 45% discount to its NAV of AED 11.7.
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| اسيا |
أوربا |
أمريكا |
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جميع البيانات عند إقفال السوق |
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