Eastern & Oriental’s (E&O) 3QYFY21 net profit came in at RM0.8m (-95.6% YoY,-81.3% QoQ) primarily lifted by foreign exchange (FX) gain of ~RM14.2m. Stripping-out the FX gain during the quarter, Group YTD net loss is estimated at RM5.5m, which is still behind our and consensus full year net profit estimates in excess of RM20m. Group 3QFY21 revenue dropped by 57.6% YoY to RM165.5m due to adverse impact from the enforcement of the Conditional Movement Control Order (CMCO) within Malaysia in the last calendar quarter of 2020, as well as overseas travel restrictions which negatively impacted business activities especially its hospitality business. As such, we now expect the Group to register net loss of RM8.3m in FY21 (from RM21.6m net profit previously) after assuming slower billings from STP2A, higher losses from hospitality and the completion of “The Peak” land disposal (revenue of RM88m) now expected to only be in FY22, from 2HFY21 guided earlier due to slower than expected approval process due to MCO. Maintain our Neutral call due to the lack of re-rating catalysts, and fair value of RM0.50 TP (at ~70% discount to RNAV, excluding STP2B&C).
Source: PublicInvest Research - 24 Feb 2021
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2021-02-24 18:48