PETALING JAYA: Despite plans to venture into developing affordable homes in Penang, Skyworld Development Bhd
’s near-term earnings would likely remain soft, analysts say.
This is because the property developer’s growth in the near term is supported by only a handful of projects, namely, Curvo, with a remaining gross development value (GDV) of RM308mil and The Vesta, with a GDV of RM508mil, said Kenanga Research.
Both the projects are in Kuala Lumpur.
The research house noted that SkyWorld, which has expertise in city high-rise projects, will be venturing into affordable homes worth an estimated RM13bil in Penang. The project is said to be the largest of its kind in the country.
The company signed a joint development agreement on Tuesday with the Penang Development Corp and its subsidiary PDC Properties for the development of a 161.5 acre site in Batu Kawan and a 31.3 acre site in Seberang Jaya.
The project that is set to commence in 2026 serves as a boost to SkyWorld’s long-term project pipeline.
Kenanga Research said the Penang project would also potentially lift SkyWorld’s results for the financial year ending March 31, 2026 (FY26) out of an otherwise lacklustre earnings phase.
The research house has an “add” rating on SkyWorld’s stock with a fair value of RM1.14.
Kenanga Research noted that based on SkyWorld’s results for its second quarter of FY25, the group’s project pipeline consists of only four ongoing projects with a total remaining GDV of RM907mil.
“We think that with the group’s operations being predominantly in the Klang Valley and wholly dependent on subcontractors for development, the roll-out of launches during the early phases of the Penang project would be relatively light, before picking up more substantially over the course of its 15-year development period,” the research house said.
Meanwhile, Phillip Capital Research has upgrade the stock to a “buy” with a target price of RM1.10, from RM0.56.
In a report, the research house said it was positive as the development is expected to increase the group’s current land bank by three-fold to RM18bil, further strengthening its property development pipeline.
“We tweaked our FY26 to FY27 earnings per share by 1% to 5% to factor in the earnings contribution from the development. With the latest replenishment, SkyWorld now enjoys improved earnings clarity, which should serve as a major catalyst for the stock,” it added.
