This former investors’ darling has fallen off investors’ buy list over the past few years. While E&O’s execution track record leaves much
to be desired, the share price has over-reacted to the bad news and ignored the company’s pluses, i.e. its strong brand name recognition and excellent landbank. The strong response to recent launches attests to the group’s marketing prowess, which it will flex with the aggressive launch lineup of over RM4bn worth of properties over the next 2-4 years.
We initiate coverage on E&O with a TRADING BUY recommendation and a target price of RM2.18 as we tag a 30% discount to
RNAV/share of RM3.11. E&O is not only a highly liquid deep-value stock but is also one of the highest-beta property stocks. It is now our top pick in the sector. Potential re-rating catalysts include 1) the unlocking of the hidden value of its assets, 2) strong earnings momentum, and 3) a return of investor interest in bombed-out liquid developers.
No comments:
Post a Comment