E&O: The giant have awaken.

E&O: A company that needs no introduction in Penang. If you happen to visit Penang try to stay in E&O Hotel you will feel the stylish, quality and excellence building with colonial heritage. Now, I know you are excited about the excellence of E&O hospitality.

Come, let us deep deeper into this giant.

This giant have awaken under Dato' Thiam. as he is planning more share buy back.

If you like ewein, you should like E&O more, cos they are both under the same industry - yes, you are right property developer in Penang.

Now, lets us see the hard facts for E&O.

E&O biodata:

1) EPS = 16 sen,
2) PE = 20, as it is a good developer.

So, Fair value is = 0.16 x 20 = RM 3.2.
Current price = Rm 1.85.
So margin of profit = RM 1.35 (73%)

For the warrant,
current price = RM 0.32,
the fair price = RM 3.2 - RM 2.6 = RM 0.60,
MOP = 0.28/0.32 (87.5%).

Penang will be a state that mirrored Hong Kong soon, so the land in the island is going to be depleted soon. If you like Ecoworld, E&O will be a better choice as it is in the island, while Ecoworld land is in the mainland. Try asking the Penangist where they prefer to stay, island or mainland.

However, I have not factored in the potential of 12 Billion  reclamiation work on STP2 and other property project in greater KL.

If this and other landbank revaluation will to be added up the PE can go to maybe 40 or even 50 (current PE of Ewein).

As the warrant will only expire in 2019, it will be a good proxy for Penang to reach vision 2020, a develop nation that mimic Hong Kong, Taiwan and Singapore with the current exemplary management by the local government.

E&O recently broke 1.80 resistant but MACD is waiting for volume to confirm a strong bullish sign. This frenzy bull will reach E&O soon! Let's wait and see.


Bon Voyage E&O to uncharted water.

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