{"id":326200,"date":"2023-12-28T13:03:09","date_gmt":"2023-12-28T05:03:09","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=326200"},"modified":"2023-12-28T13:03:11","modified_gmt":"2023-12-28T05:03:11","slug":"stock-in-focus-doubledragon-properties-corps-dd-28-dec-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-doubledragon-properties-corps-dd-28-dec-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: DoubleDragon Corp. (DD) – 28 Dec 2023 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>DD<\/td><\/tr>
Company Name<\/strong><\/td>DoubleDragon Corp.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>28 Dec 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 11.60<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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Based on DD’s fair-value adjusted Book Value per Share (BVPS) of P19.30\/share and mean 0.6x Price-to-Book (P\/B) multiple of its peers, we reckon that the stock should currently be trading at around P11.6\/share. This could further increase once the listing in NASDAQ is finalized and the stake’s value is mixed into the fold.<\/p>\n\n\n\n

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Analysis and Opinion<\/h2>\n\n\n\n

Fast-tracking Hotel 101\u2019s Nasdaq listing<\/h3>\n\n\n\n

Double Dragon\u2019s head honcho Injap Sia mentioned that if things progress smoothly, then they may be able to complete Hotel 101 Global\u2019s Nasdaq listing by the first half of next year, earlier than the initial 2026 target. So far, the DD subsidiary is constructing three projects in Madrid, Hokkaido, and LA with expected completion by 2025 for the former and 2026\/end of 2026 for the latter two. Once these projects are completely sold out, then the company will target expansion across 25 countries.<\/p>\n\n\n\n

Premium price tag<\/h3>\n\n\n\n

Injap is notably seeking a valuation ranging from USD11-Bn to USD17-Bn based on a Price-to-Sales multiple of 6 to 9x. When comparing this to the valuation that was realized by its peer Selina, a hotel operator that similarly also listed on Nasdaq via SPAC last 2021, we note that Injap\u2019s asking price poses a premium. Based on our
estimates, Selena was able to capture a Price-to-Sales valuation of only 5.1x, 32% lower than the median 7.5x multiple that Sia is pushing for.<\/p>\n\n\n\n

While it remains to be seen whether the SPAC\u2019s investors will be willing to stomach such a price for Hotel 101 Global, we note that the condotel operator and developer may have some edge over Selena which could support the premium valuation. In terms of revenue growth, Selena\u2019s business model would likely generate less revenue per unit given that the company focuses on simply leasing out affordably priced units and remote-working spaces to a young target market.<\/p>\n\n\n\n

Multiple revenue streams<\/h3>\n\n\n\n

On the other hand, Hotel 101 Global will be selling condotel units in premiere tourist locations which would generate more revenue than simple affordable leasing (as long as completion does not fall behind schedule) due to the recognition of high sales values. Additionally, Hotel 101 Global also has the added benefit of having multiple revenue streams seeing as it will generate topline from a.) the initial sale of the
units to buyers, and b.) from its 70% cut in gross room revenues when managing and renting out the units on behalf of the owners. <\/p>\n\n\n\n

On the flipside though, we also note that Hotel 101 Global is vulnerable to execution risk, especially since all of its projects are still under construction and not yet operational, contrary to Selena which was already operating at the time of its listing.<\/p>\n\n\n\n

Successful listing will boost shareholder value<\/h3>\n\n\n\n

While the terms of the proposed listing are still up in the air, we believe that this would be greatly positive to the stock\u2019s shareholders if it does push through. Assuming that the 7.5x Price-to-Sales is realized, then the USD14-Billion valuation will dwarf DD\u2019s market cap, currently at only P18.1-Billion. <\/p>\n\n\n\n

Even a potential dilution in the ownership stake of DD in Hotel 101 Global following an SPAC M&A would still likely leave the company with a stake worth billions of pesos which should increase its stock\u2019s intrinsic value. The same holds true even when assuming a more discounted 5.1x Price-to-Sales (multiple of peer Selena). <\/p>\n\n\n\n

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Check how many brokers recommend this stock<\/h2>\n\n\n\n
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All Stock Rankings<\/a><\/blockquote>