Am taking fresh position again. Besides being a deep asset value play, I see these potential developments - 1) another privatisation offer by Quek Leng Chan (he failed at sgd1.25 before), or 2) REIT listing for its lucrative UK/London hotel chain.
In my view, I think he will opt for the 2nd option in order to recycle its assets (into an asset light business model). Financial position of the group is relatively strong and stable. Leverage ratio for Guocoleisure is low - current borrowings can be fully repaid from sale of non core assets.
With the recent purchase of shares by Quek and the change in management team, I feel the wheel is turning soon on this Group and for its shareholders.
GuocoLeisure will hold a presentation of its FY 15 results soon, I expect analysts to continue their positive view on GuocoLeisure as the company embarks on a rejuvenation of its biz model. But I am cautious in view of its not so great earnings so far. Let's see if it can break $1.10 this month despite the weak overall market sentiment.
