- We raise our target price (TP) by 70% and upgrade our rating to BUY from OUTPERFORM. 

- The higher TP is mainly due to our 80% increase in Long Chau (LC)’s valuation in FRT’s SoTP.

- Our higher valuation for LC is mostly due to changing our valuation method from a 100% DCF to a 50% and 50% mix of the DCF and price-to-sales (P/S) methods. Given LC's intent to build a healthcare ecosystem, we believe adding the P/S valuation is effective to capture its growth potential, especially since LC is still in the expansion phase and has yet to achieve steady profitability (more details in page 5-6). In 2023-28F, we project LC’s sales CAGR to be 24%. We also lift LC’s aggregate 2026-33F EBIT by 47% as we include a forecast for LC's vaccination services, which we expect to contribute 12%/18% to LC’s net profit in 2028F/2030F.

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