KUALA LUMPUR: The trading stock of Eco World Development Group Bhd (EcoWorld) opened one sen higher at RM1.11 a share on Friday following the release of its third-quarter earnings.
In its review of the results, CGS-CIMB Research said the property developer posted a 45% year-on-year (y-o-y) jump in 3QFY23 core net profit to RM65.5mil after stripping out impairment, write-down and forex, which brought its 9MFY23 core net profit 23% higher y-o-y to RM184mil.
According to the research firm, this came to 77% of its and Bloomberg's consensus FY23 estimates, which brought it in-line with expectations.
CGS-CIMB reiterated an "add” call on the stock with the unchanged target price of RM1.34, driven by its diversified product range, low gearing level and decent dividend yields.
It said potential re-rating catalysts include stronger-than-expected sales for its existing projects and new launches and timely completion of projects.
On the flip side, downside risks include larger-than-expected losses from its international joint ventures and lower-than-expected take-up rate for its industrial and affordable products, said the research firm.
Meanwhile, MIDF Research said EcoWorld's 9MFY23 core net earnings came below its expectations at 65% of its full-year estimate, due to the higher-than-expected expenses during the quarter.
It maintained its "neutral" outlook on the company due to limited upside, but revised its target price higher to RM1.07 from RM1.02 previously, on the back of a narrower RNAV discount due to a healthy balance sheet and higher dividend payout.
MIDF also raised its dividend forecast to six sen from five sen in view of the higher-than-expected dividend payout.
"We continue to see stable new sales outlook for Eco World, underpinned by its residential and industrial products," said the research firm in a note.