Eastern & Oriental - Planting Seeds of Successful Partnership

Date: 
2012-04-03
Firm: 
PUBLIC BANK
Stock: 
E&O
Price Target: 
2.20
Price Call: 
BUY
Last Price: 
0.965
Upside/Downside: 
+1.235 (127.98%)
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

Discussions
Be the first to like this. Showing 1 of 1 comments

erkongseng

i believe that is a good share .tp is $2.20 .good future .

2012-08-15 19:12

Post a Comment