H22 Hong Leong Asia: An Undervalued Gem with a Positive OutlookHong Leong Asia (HLA), the industrial arm of Singapore’s Hong Leong Group, stands out as an undervalued prospect poised for substantial growth. With its share price currently at S\$0.83 and a well-supported target price of S\$1.11, representing a 33.9% upside, the company remains a compelling buy. HLA’s portfolio, primarily comprising diesel engines and building materials, is well-positioned to capitalize on the robust demand in these sectors.
HLA is valued at S\$1.11 per share based on a sum-of-the-parts (SOTP) analysis, with the building materials and diesel engine segments valued at S\$607 million and S\$896 million, respectively. With a current market cap of approximately S\$620 million, the company is considered undervalued, particularly its diesel engine segment. The recommendation is to maintain a “BUY” stance.
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