Eco World Development Group Bhd
(July 10, RM5.18)
Maintain add with target price of RM8.15: We cut our financial year 2014 ending Sept 30 (FY14) earnings per share forecast by 55% to factor in the absence of launches from existing projects but we retain our FY15 and FY16 numbers. Our implied target price (still based on parity with revised net asset value [RNAV]) rises after revising its RNAV for the surplus value from its new land bank in Semenyih. Eco World remains an “add” and one of our top sector picks, with its asset injection exercise and land banking being the key catalysts.
We estimate that Eco World’s four projects will boost group gross development value by around RM20 billion to nearly RM63 billion. This will put Eco World behind only UEM Sunrise Bhd and S P Setia Bhd.
Since our initiation of coverage on Eco World, we have had to explain to investors that Eco World is neither a low price-earnings ratio nor high yield play. Instead, the company is an RNAV and newsflow play. We expect Eco World to replicate S P Setia’s sterling 20-year track record, but within a much shorter period as it is in a hurry to build scale and size. — CIMB Research, July 9
For more information on
Building and Construction seminars, please visit www.asiapacificevents.com
No comments:
Post a Comment