Initiation of Coverage: At the inflection of flex office‘s growth

Research evidence excerpt

Initiation of Coverage: At the inflection of flex office‘s growth

mber of From To % ch Cons.

members rising to 4,035 and occupied workstations to 29,422 in 2025, representing 12/26E - 0.00 - -

increases of 27% and 10% respectively compared to 2023. 12/27E - 0.02 - -

12/28E - 0.06 - -

Enters expansionary growth phase with market openings

Michael Lim

We expect the number of operational centres to double to 100 by 2028. This implies a

Analyst

+19% CAGR in workstations and underpins our +26% revenue CAGR estimate across michael-h.lim@ubs.com

2025-28E, alongside a +2ppts cumulative increase in occupancy and a +4% CAGR in +65-6495 5902

revenue per occupied workstation. As revenue growth outpaces the increase in cash

Terence Lee, CFA

lease payments, which we forecast at a +21% CAGR, we expect cash EBITDA margins to

expand from 9.4% in 2025 to 13.8% in 2028, driving a +43% CAGR in cash EBITDA. terence.lee@ubs.com

+65-6495 3570

Valuation: S$1.18 price target based on 9x 2027E EV/cash-EBITDA multiple

The share price has fallen since listing and we think reflects limited investor familiarity

with the flex office model, and execution concerns. JustCo plans to open 28 centres in

2026, and Japan is a high-margin market to monitor, as slower expansion could weigh

on cash EBITDA. The market capitalisation and free float are also small, which heightens

liquidity risk. We are constructive, and view the extent of the selloff as difficult to

reconcile with valuations at 1.8x EV/cash-EBITDA and 0.4x price-to-cash-EBITDA

growth, which is attractive versus peers. The listed workspace peer set is relatively

narrow, leaving a wide 4-13x EV/cash-EBITDA trading range and limiting the value of a

single point multiple. Our price target is based on 9x multiple, the midpoint of the range.