KUALA LUMPUR: Kenanga research has maintained its outperform rating on Eco World Development Group Bhd
with an unchanged target price of RM1.15.
In a research note, Kenanga said EcoWorld and EcoWorld International (EWINT) are targeting RM6bil in sales each in their respective domestic and international markets over FY19-20.
Both companies are also expecting to declare their maiden dividends in FY19 although details on the payout ratios and dividend pilicies are still forthcoming.
In its recently announced results, the group's 1Q19 core net profit of RM30mil came in broadly within expectations at 15% of Kenanga's and consensus FY19 estimates.
"We expect stronger earnings in coming quarters from strong contributions from its JCE projects, especially EWINT," said Kenanga.
EcoWorld's 4M19 local sales of RM230mil accounted for only 8% of Kenanga's FY19E local sales target of RM3.01bil although this is deemed in line due to the last quarter's extraordinary sales performance.
The research house added that many buyers held back purchases in anticipation of Budget-2019 stamp duty relief and discount under the Home Ownership Campaign.
Meanwhile, 27% associate EWINT recorded RM146mil in sales over 4M19, which Kenanga said is also in line with its FY19E target of RM2.33bil, as the group expects to lock in more London build-to-rent projects.
Limited time offer:
Just RM5 per month.
