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CIMB Research rates E&O an Outperform
by hlk Thu 14 Jul 2011, 09:55
KUALA LUMPUR: CIMB Equities Research continues to rate Eastern & Oriental Bhd as an Outperform as the stock could be catalysed by the finalisation of approval for the Seri Tanjung Pinang Phase 2 and a newfound management dynamism and lofty KPI targets.
It said on Thursday, July 14 although there were no major surprises from E&O’s roadshow to Singapore last Friday, the pains that management took to explain its new direction to investors were encouraging.
“Monday’s sale of the Tesco building in Penang for RM134m was a nice surprise that will take the company one step closer to its earnings targets,” it said.
CIMB Research said it took a positive view of the Tesco sale as the price is 24% above its valuation and increases its FD RNAV/share by 2 sen to RM2.82.
The net effect of the gains from the Tesco sale and a slight delay in the launch of the final three condo blocks in Penang is a 41% upgrade of FY12 net profit but earnings cuts of 6-9% for FY13-14.
“We raise our target price by 2 sen to RM1.98 as the Tesco sale increases our FD RNAV/share by 2 sen to RM2.82,” it said.
It said on Thursday, July 14 although there were no major surprises from E&O’s roadshow to Singapore last Friday, the pains that management took to explain its new direction to investors were encouraging.
“Monday’s sale of the Tesco building in Penang for RM134m was a nice surprise that will take the company one step closer to its earnings targets,” it said.
CIMB Research said it took a positive view of the Tesco sale as the price is 24% above its valuation and increases its FD RNAV/share by 2 sen to RM2.82.
The net effect of the gains from the Tesco sale and a slight delay in the launch of the final three condo blocks in Penang is a 41% upgrade of FY12 net profit but earnings cuts of 6-9% for FY13-14.
“We raise our target price by 2 sen to RM1.98 as the Tesco sale increases our FD RNAV/share by 2 sen to RM2.82,” it said.
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