CIMB Research ups E&O target price to RM2.48

KUALA LUMPUR: CIMB Equities Research has raised the target price for Eastern & Oriental Bhd (E&O) from RM2.07 to RM2.48 and maintained its Outperform recommendation.
The
research house said on Tuesday the results for the financial year ended
March 31, 2013 were in line with expectations as net profit was spot on
with its forecast and exceeded consensus by only 2%.
“We tweak
our FY14/15 EPS forecasts lower for housekeeping purposes. Although our
target basis of a 20% discount to RNAV is unchanged, our target price
rises as we revise RNAV higher by 20% to RM3.10 to factor in the
appreciation in the value of its landbank in Penang.
“We maintain
Outperform on the stock with the key catalysts being 1) the maiden
launch of its Iskandar project, and approval for Phase 2 of Seri Tanjung
Pinang,” it said.
E&O sold RM530mil worth of properties in
FY13, a 33% decline on-year. The lower sales were due to a delay in the
launch of the Medini wellness project and the Mews condo in Kuala Lumpur
from its original schedule by around a year.
CIMB Research said
the fourth quarter's new sales of RM180mil were 50% higher on-quarter
but 59% lower on-year. It said 70% of new sales in FY13 came from the
Penang condos, while St. Mary contributed the remaining 30%. Unbilled
sales at end-FY13 stood at RM650mil.