Nomura Equity Research upgraded property developer Wing Tai Holdings to 'buy' from 'neutral' and raised its target price to S$1.76 from S$1.60.
Wing Tai shares were up 0.8 percent at S$1.33 and have risen 41 percent so far this year.
Nomura said while the market is concerned about Wing Tai's exposure to the tepid prime luxury segment, most of the downside risk is already priced in. It believes the market's current valuation of Wing Tai's portfolio is "overly conservative".
Potential catalysts for re-rating include higher-than-expected dividend and redevelopment of existing properties to realise hidden value, Nomura said.
"To replenish its residential land bank at a reasonable cost, we believe the company could explore redevelopment potential of its existing properties, such as the industrial properties in Kovan," Nomura said.
1000 (0200 GMT)
(Reporting by Eveline Danubrata in Singapore; firstname.lastname@example.org)