DESIGN STUDIO Furniture Manufacturer, a small-cap company (market cap S$176 million as of yesterday) has welcomed a new substantial shareholder, Prudential Asset Management (Singapore), which is one of the largest fund management companies in Singapore.
In a filing last night to the Singapore Exchange, Design Studio said Prudential had bought 634,000 shares of Design Studio on Jan 8, lifting its shareholding past the 5% level – from 4.94% to 5.19%.
Kim Eng Research expects full-year FY09 net profit to be $27.1 m
In a second filing last night, the company said Prudential also bought 30,000 shares on Jan 11, enlarging its stake to 13,278,000 shares, or 5.20%.
Design Studio is a furniture manufacturer and a fitting-out specialist for private residential developments and hospitality and commercial projects.
It owns 45% of DDS Singapore, which is the company fitting out the casino for Resorts World ($47.9 million) and hotel tower 1 of Marina Bay Sands ($69.1 million).
Prudential Asset Management (Singapore) had approximately S$57.96 billion in funds under management of which approximately S$45.90 billion were discretionary funds managed in Singapore as at 30 September 2009.
Only one research analyst, Pauline Lee of Kim Eng Research, covers Design Studio, whose shares closed yesterday at 69 cents.
In her report just last month, she had said that the stock is “still at the early stage of re-rating.”
Back then the stock was trading at 57 cents.
She added: “Despite its strong growth potential, the stock is deeply undervalued. It is trading at an ex-cash PER of 3.4x (a sharp discount to its peers) and offers a good dividend yield in excess of 5%.
"Design Studio can also be a cheap alternative to the buoyant property and hospitality sectors in Asia. Growth catalysts are imminent as it explores opportunities in fast-growing markets like China and India. Reiterate Buy.”
She called Design Studio (www.designstudio.com.sg) a potential multi-bagger and set a target price of $1.
Read excerpts of her report in DESIGN STUDIO, KS ENERGY, SUNTEC REIT: What analysts now say.....
Design Studio touched its 52-week high yesterday (Jan 12) at 70.5 cents.
