Interesting. This morning someone says TP 2+. Then later someone else says a much lower number. Who is cleverer? If both not so clever then susah lah...................over to you Enid888.
The strategic land beside Straits Quay Mall was sold and developed by one of E&O major shareholder, Kerjaya Prospek. Why is Terry Tham agreed to sell this piece of prime land to Kerjaya Prospek? The piece of land is so prime and strategic and it is a big loss to E&O. The project is called Straights Residences and it is launched now.
E&O had posted a very disappointing 2Q19 result. If we were to exclude the forex gain of RM9mil, core profit would have only been around RM10mil for the quarter. Investors are worried that the trend of slow property sales might persist in the near to mid term.
FY20 profit is expected to be lower than FY19 with 3 analysts projecting a fall of core profit to only RM70mil. At the current price, this will translate to a PE valuation of 20.7x which is high considering the average property industry PE is currently trading at less than 10x.
That being said, management is projecting a total combined of RM1.5bil new property launches in the for FY20 and FY21 which might help push the company’s earning from FY21 onwards. But all this will still be dependent on the property market outlook during the launches. If the market sentiment remains weak, management might decide to push the new launches further back which will affect any future earnings growth to E&O.
If you are looking to diversify your portfolio outside of E&O (due to the weak earnings sentiment given the weak property market), I would recommend you to look at MBMR.
MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.0x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.5x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.
For FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19 and also the new Alza in 2H19.
Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.18.
Major IBs and fund houses had been negative about property stocks for the last 4 years but the property stocks kept reporting good results with single digit PE for many of them. Were the IBs and fund houses wrong? I think they are and their analysis are too crude and coarse. Just simply say "property market not good, so property counters not good". Aunties in pasar also can give this kind of analysis.
If you check back the IBs' and fund houses' recommendations for the last 4 years, they recommended Oil & Gas and Construction counters. Many people loaded onto their lorries and ended up in Holland.
Look at their recommendations, UMWOnG (Velesto), Armada, Icon, SapuraEnergy, Perisai, GKent, MRCB and Felda before the share prices tumbled. All are either "Strong Buy", "Buy" or "Hold". May be they gave these ratings to benefit themselves.
enid888 good to note you're back and I like the last sentence of your 12/1. Besides your point most analysts are not competent or confident to share a realistic TP. Just check out the stock pick for 2019 of the Star. How many TPs can you see? If you think E&O is a good buy now you must be confident the world market will not tank with all DT's help. I'll consider <1.00. What do you think of related operation like Signature ? Cheers
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
sell
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Posted by sell > 2018-10-29 04:30 | Report Abuse
Below RM 1 this week?