CIMB Research retains Outperform on E&O

KUALA LUMPUR: CIMB Equities Research retains its Outperform outlook on Eastern & Oriental Bhd (E&O) and target price of RM1.96.

It said on Thursday, June 30 that although there were no major surprises from E&O’s briefing on its Iskandar Malaysia property JV with Khazanah and Temasek, it was positive of this venture.

CIMB Research said this venture was a stamp of approval from these blue-chip institutions and another feather in E&O’s cap.

“But earnings contribution will be minimal until FY3/15 as the earliest launch date for the 210-acre wellness township is end-2012. We retain our earnings forecasts and our target price of RM1.96, which we continue to peg to a 30% discount to its FD RNAV/share of RM2.80.

“The stock remains an OUTPERFORM as this JV could catalyse a re-rating of E&O, along with 1) finalisation of approval for STP Phase 2 and 2) newfound management dynamism and lofty KPI targets,” it said.