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24 March 2023. Friday
KUALA LUMPUR (March 24): Research houses have maintained their “outperform” rating of Eco World Development Group Bhd (EcoWorld), following the release of its encouraging results for the first quarter ended Jan 31, 2023 (1QFY2023).
Kenanga Research in a note said the group’s first four months of FY2023 sales of RM1.35 billion indicated that it is on track to meet its full-year target of RM3.5 billion.
“We continue to like EcoWorld for its ability to manoeuvre the current headwinds and defend its margins, given its strong branding and nimble cost structure.
“This translates into strong cash flow generation, underpinning consistent dividends,” the research house said.
As such, it maintained its “outperform” call on EcoWorld and its target price (TP) for the group’s shares at 83 sen per unit.
Meanwhile, Public Investment Bank Bhd also maintained its “outperform” rating due to EcoWorld’s attractive risk-reward proposition, with a TP of 75 sen per share.
“We still believe that the group could continue its sales momentum, and offer an attractive dividend yield of more than 7% at the current share price,” it said.
However, in a separate note, MIDF Research revised its FY2023 earnings forecast for EcoWorld downwards by 4.3%, due to a lower contribution from joint-venture activity.
“EcoWorld’s 1QFY2023 core net income of RM56.6 million came in within consensus expectations, but slightly below ours, making up 22.5% of the consensus full-year forecast and 19% of ours.
“The slightly negative deviation could be attributed to the lower-than-expected contribution from joint ventures in 1QFY2023,” it said.
Nonetheless, the research house remains positive on EcoWorld due to the group’s stable new sales outlook, driven by sales of residential and industrial properties.
As such, it maintained its “buy” call on EcoWorld shares, with an unchanged TP of 87 sen per unit.
Read also:EcoWorld kicks off FY2023 with stronger sales, 1Q profit at RM57m
