Accordingto Bloomberg estimates, E&O is expected to rake in net earnings of RM59m inFYE March 2010 and RM60m in FY11, from RM38m loss in FY09. At RM1.07/share,E&O is trading at 0.75x PBV of FY10 and 0.67x PBV of FY11. We have a6-month technical target price of RM1.30 for E&O, based on its 5-yearaverage 0.92x PBV on estimated book value of RM1.43 in FY2010.
E&Ohas broken the 5-day SMA at RM1.00 and 100-day SMA at RM1.03 this last two daysbefore closing above the downtrend line from 52-week high of RM1.59. A strongbreakout from the symmetrical triangle downtrend line is expected to end theconsolidation phase and will push share price higher to retest the resistancetargets of RM1.14 (38.2% FR from peak of RM1.59 to low ofRM0.86), RM1.23 (50%FR) and RM1.31 (61.8%FR). |