Billings For Eastern & Oriental Expected To Pick Up In Foreseeable Future

Eastern & Oriental (E&O)’s 1QFY24 (Mar) results missed expectations, due to slower billings, which were a blip, for its Andaman projects.

“However, we expect billings to pick up in the coming quarters, backed by its RM269.2m property sales in 1QFY24,” said RHB Research (RHB) in the recent Malaysia Results Review.

RHB raises their Target Price to better reflect the better market sentiment ahead, given the lifting of the political overhang post state elections.

The slower billings from ongoing projects were offset by the higher recognition of sales of land to KWEST, as well as a better performance YoY from the hospitality segment.

“1QFY24 property sales amounted to RM269.2m, vs RM121.1m in 4QFY23. Arica, the second serviced apartment project at Andaman Island, was the largest contributor, raking in RM194.8m in sales in the quarter. The take-up rate for Arica is now more than 70%, while sales for The Conlay and The Peak were relatively slow,” said the research house.

Management is expecting full-year sales to be around RM400m. In 4QFY24, E&O plans to roll out some landed property products and another condominium project at Andaman Island worth a combined gross domestic value of about RM800m.

“The company is also looking to kickstart its project in Elmina West to mitigate single-location risk, and we understand that some earthworks have already commenced. The maiden launch of the landed units is expected to be in FY25, which has an indicative gross domestic value of RM500m,” said RHB.

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