Source of opportunity

GuocoLand offers attractive leverage to China and Singapore. We

welcome expansion of its development pipeline, particularly its entry in

2007 into two mega projects, Dongzhimen in Beijing and Leedon Heights

in Singapore. While the stock has outperformed YTD, the group?s growth

is accelerating and we see the recent correction following debt/equity

issuance as a buying opportunity. We think the market has not fully priced

in 4 acquisitions (including Dongzhimen) made in the past 5 months,

which we estimate have expanded RNAV by over 70%, partly due to

growth of asset values in China and Singapore. Adding to Conviction List.

Growth

Returns *

Multiple

Volatility Volatility

Multiple

Returns *

Growth

Investment Profile: Guocoland

Low High

Percentile 20th 40th 60th 80th 100th

* Returns = Return on Capital For a complete description of the

investment profile measures please refer to

the disclosure section of this document.

GUOC.SI

Asia Pacific Property Peer Group Average

Catalyst

We see near-term share price performance driven by launch of Singapore

residential projects, Casa Rosita in Dec 2007 & Palm Beach Garden in

1Q2008, and China projects Changfeng (Shanghai) and Ascot Park

(Nanjing). We expect more Singapore site acquisitions to further drive the

share price. Longer term, we expect free float increase post CB conversion

and execution of a capital efficient business model to act as catalysts.

Valuation

Our 12-m TP of S$6.40 is set at parity with our June-08 RNAV estimate and

reflects dilution from the recent rights and convertible bond issues.

GuocoLand trades at a 30% discount to our forward RNAV estimate

compared with an average 6% premium to a mix of December 07 & 08

RNAVs for other Singapore developers under our coverage. We think its

RNAV discount should dissipate given about 90% of our RNAV comes from

the China and Singapore markets, on which we are positive.

Key risks

Downside risks: failure to execute on large-scale projects and deterioration

in the China / Singapore property markets. Upside risk: shares trading at a

premium to RNAV as investors better value the group?s transformation.