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- The house initiated coverage on the property developer with a ‘buy’ call and the highest target price on the street at 78 sen, a potential upside of 44% gain from the current price, citing solid earnings visibility from a heavy pipeline of projects over the next decade.
KUALA LUMPUR (Sept 26): SkyWorld Development Bhd (KL:SKYWLD) is set to more than double its earnings over the next three years, said BIMB Securities.
The house initiated coverage on the property developer with a ‘buy’ call and the highest target price on the street at 78 sen, a potential upside of 44% gain from the current price, citing solid earnings visibility from a heavy pipeline of projects over the next decade.
“This pipeline provides clear visibility on supply,” the house said, noting that SkyWorld has lined up five property launches worth RM2.2 billion combined for the current financial year ending March 2026 (FY2026) alone.
Shares of SkyWorld, listed a little over two years ago, have rebounded off their lows in April during the global tariff turmoil. The stock was trading at 54 sen at the time of writing on Friday, valuing the company at RM540 million.
The stock currently carries four ‘buy’ recommendations, including from BIMB Securities, and no ‘hold’ or ‘sell’ calls, with a consensus 12-month target price of 66 sen.
BIMB Securities is projecting average annual revenue growth of 22% over three years, reaching RM808 million by FY2028. By then, net profit could hit RM99.8 million.
At the target price of 78 sen, SkyWorld would still be trading at a 60% discount to its net asset value of RM2.17 per share.
BIMB Securities said the wide discount is in line with the sector average for small caps, to account for “a light market liquidity and execution risk across the development pipeline amid macro uncertainties”.
Nevertheless, the outlook for SkyWorld will be backed by RM483 million in unbilled sales and a RM19.5 billion development pipeline over the next decade, BIMB Securities said.
“Consistent delivery and cash conversion should help narrow the discount and drive a rerating,” the house added.
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