Real Estate
February 02, 2011
Dragon Ukrainian Properties & Development: Acquisition of New Asset Not Priced In - Dragon Ukrainian Properties & Development’s (DUPD) recent acquisition of a 35% stake in Arricano Trading has not yet been reflected by a rise in DUPD’s market capitalization. We estimate that DUPD’s interest in Arricano’s commercial property projects is worth USD 100mn, and that DUPD’s NAV is USD 269mn. This implies that the company’s stock currently trades at a 51% discount to its NAV. This figure is 27 p.p. higher than the corresponding discount for DUPD’s Russian peers. We initiate our coverage of DUPD with a target price of USD 1.92/share, implying a potential upside of 72%.
