Citi sets Solidere target price at $31 per share

Solidere made agreement of land plot sale of around $50 million, says report

August 10, 2011- Citi recently set the target price of Solidere at $31 per share, Audi Bank reported in its weekly publication. Solidere’s share price closed at $16.5 as at August 9th.

Citi said that its valuation of the Solidere stock price is based on its estimate of net asset value (NAV). It said that its estimate of Solidere’s NAV resulted from the value of the remaining 1.9 million square meters of land bank, investment properties held to earn rental income, and uplift for unsold land levels of $3,000 and $4,500 per square meter, Beirut Central and Waterfront Districts, respectively.

Citi said that its NAV estimate does not include any future value creation from the company’s international business.
Citi said that Solidere’s management disclosed an agreement of a land plot sale from its reclaimed Waterfront land bank totaling around $50 million over the last couple of weeks.

It said that Solidere expected another transaction in the next few weeks.
Citi considered some threats that could prevent Solidere shares from reaching the target price. It rated Solidere as ‘high risk’.

Solidere posted net profits of $196 million from its local operations in 2010, up 7.8 percent from $182 million in 2009. Revenues from land and real estate sales rose by 10.5 percent to $337 million in 2010, while revenues from rental properties increased by 51.4 percent to $41.2 million year-on-year.