By Farah Halime

The company best known for developing the world’s tallest tower, the Burj Khalifa, gained more than 9 per cent in the last three trading days of the week, closing at Dh2.68 per share yesterday. However, that is still about 50 per cent below the company’s book value of Dh5.10.

Downtown Dubai
Downtown Dubai

As one of the most heavily traded stocks on Dubai’s main index and the largest developer by market capitalisation in the Mena region, Emaar is as “blue chip” as it gets for local investors. Emaar outperformed other stocks in the property sector throughout the first 10 months of 2009, rising 50 per cent. After the market took a hit in November that year, Emaar shed 35 per cent.

Now analysts have spotted another opportunity.

The Credit Suisse investment banker Sofia Rehman said the market was not fully pricing in the value of Emaar’s assets. She has valued the company’s malls and hotels business at Dh3.04 per share, compared with the current market price of Dh2.44.

The market was ignoring Emaar’s international operations, which are expected to contribute 29 per cent of Emaar’s revenue this year and 47 per cent next year.

“At these levels, any value generated from international projects is for free,” said Ms Rehman, who reiterated an “outperform” rating for Emaar but cut its target price to Dh4.32 from Dh5.19.

Rasmala is also positive about Emaar and issued a “buy” recommendation yesterday with a target price of Dh3.10.

The bank said the company’s strategy to take its model of master-planned communities to emerging markets such as India and Egypt should not be overlooked.

Property sales remain Emaar’s main source of revenue, accounting for 74.1 per cent of its total revenue for the first nine months of last year.