$Boustead(F9D.SI)$ Boustead update and target price
Boustead Industrial Fund shareholders, including Metro and AP SG 21, have collectively agreed to divest the fund to IU Boustead, paving the way for a proposed REIT portfolio of $1.9 billion. This transaction crystallises asset value and creates optionality for cash proceeds, sponsor fees, or retained units.
Updated target price (TP) — summary
- Base-case TP: S$2.60 (≈ +19%)
- Bull-case TP: S$3.00+ (≈ +38%+)
How I translated these into TPs (high level)
- If Boustead realises material cash or units from the divestment (sale to the REIT), it can reduce debt, pay special dividends, or retain a sponsor stake that generates recurring fees — each action supports a higher share price.
- The base TP (S$2.60) assumes a modest NAV uplift per share plus a small rerating as investors value clearer, more focused cash flows and potential recurring REIT income.
- The bull case (S$3.00+) assumes stronger-than-expected REIT pricing, significant cash returned to shareholders or meaningful recurring sponsor income, and a re‑rating of Boustead’s remaining businesses.
What will move the TP materially
- Final deal mechanics: cash vs. share consideration; percentage of assets sold to the REIT; sponsor stake retained.
- Use of proceeds: special dividend, debt paydown, or reinvestment.
- REIT pricing and demand: IPO pricing range, anchor investors, and bookbuild demand.
- Regulatory/listing approvals and any changes to the portfolio valuation.
- Market reaction to the prospectus and sponsor commitments.
Caveat
These TPs are scenario estimates, they depend heavily on the final IPO structure and how Boustead receives value (cash vs. units).
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