Stock Name: E&O
Company Name: EASTERN & ORIENTAL BHD
We initiate with an Outperform call and a RM2.20 target price (46% upside). We believe larger developers' competitive positions have improved with their sizable landbank and ties with government-linked companies. The property industry is getting consolidated, with the larger developers commanding better margins and higher market share.
Source: PublicInvest Research Research - 2 April 2012
Download: Research PDF
Company Name: EASTERN & ORIENTAL BHD
| Research House: PUBLIC BANK | Price Call: BUY | Target Price: 2.20 |
We initiate with an Outperform call and a RM2.20 target price (46% upside). We believe larger developers' competitive positions have improved with their sizable landbank and ties with government-linked companies. The property industry is getting consolidated, with the larger developers commanding better margins and higher market share.
- E&O's premium branding, prime landbank and marketing prowess in our view, attracted Sime Darby to emerge as the major shareholder and roped in Mitsui Real Estate Sales Co LTd and Khazanah-Temasek as marketing and JV partners. These collaborations could broaden its market reach by leveraging on the partners' huge landbank and cross-marketing.
- In 2012, The Group will be busy selling Phase 2-3 Quayside condominiums in STP1 Penang with estimated GDV of RM1.2bn(average ASP RM1250psf) and possibly, launching a new RM360m (RM1200psf) condominium project in Jalan Yap Kwan Seng. Medini mixed development (GDV3bn) is targeted to be launched on 1QCY13.
- Our fully diluted RNAV for E&O is RM3.10. Potential catalyst include final approval for STP2 (760 acres, GDV RM 12-13bn), JV's with Sime Darby (37,000 acres landbank with an estimated RM100bn. GDV) and realizing its KPI of targeting RM250-300m in FY12/13.
Source: PublicInvest Research Research - 2 April 2012
Download: Research PDF
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