KUALA LUMPUR: SkyWorld Development Bhd's share price jumped to a high of 71.5 sen in early session on Wednesday after it signed two strategic agreements to jointly develop the country's largest affordable housing project with Penang state agencies.
The counter opened 6.4 per cent or four sen higher at 66.5 sen from Tuesday's closing of 62.5 sen.
At 11.46am, the share price rose 2.4 per cent or 1.5 sen to 64 sen with its market capitalisation at RM640 million. A total of 17.87 million shares changed hands.
SkyWorld signed a joint development agreement with the Penang Development Corporation (PDC) and its subsidiary PDC Properties to develop more than 35,000 affordable housing units with a gross development value of RM13 billion.
The three parties will jointly develop both Rumah Mampu Milik and the newly announced Rumah Bakat Baru Madani schemes with homes priced between RM225,000 and RM420,000.
Targeting the middle 40 per cent income group (M40) or those with household income below RM11,800 a month, the first phase will be launched in 2026, and the entire project spans 10 years.
Philip Research Sdn Bhd in a note has upgraded the stock to "buy" call with a higher target price of RM1.10 from 56 sen previously.
The research firm raised its financial year ended March 31, 2027 (FY27) earnings forecasts by five per cent to factor in the earnings contribution from this project but trim FY26 earnings by one per cent on lower interest income post-acquisition.
"With the latest replenishment, SkyWorld now enjoys improved earnings clarity, which should serve as a major catalyst for the stock," it added.
Philip Research is optimistic over the project as the potential GDV of RM13 billion over 15 years, is expected to increase its current land bank by threefold to RM18 billion, further strengthening its property development pipeline.
Post acquisition, the firm expects SkyWorld's net gearing to increase to 0.1 time from 0.03 times as at the second quarter of financial year 2025 (2QFY25).