ECOWLD (8206) - Eco World Development Group Bhd - Four maiden launches in 2015
Target RM2.60 (Stock Rating: ADD)
Eco World's large group session and one-on-one meetings at Invest Malaysia 2015 were all well attended. The key focus was on its many projects, including its newly acquired landbank in Kuala Lumpur and Penang. We make no changes to our EPS forecasts, Add rating and target price, based on 10% discount to RNAV. Eco World remains one of our top picks in the property sector. Potential re-rating catalysts include robust new sales and strong earnings growth.
What Happened
Eco World presented to a packed group session at Invest Malaysia today. The company was represented by CEO Dato’ Chang Khim Wah and chairman Tan Sri Liew Kee Sin. Dato' Chang's presentation was very comprehensive and touched on the fundamentals of the property sector, progress the company has made since it was set up two years ago, and its recent landbanking efforts, project launches and sales. Tan Sri Liew touched on the London projects of Eco World International and its quick turnaround strategy there.
What We Think
Eco World's restructuring exercise is nearly completed while most of the key landbank it has been eyeing has also been announced and finalised. The main thing for the company now is to focus on execution. We are not concerned that its four months sales from Nov 14 to Feb 15 amounted to only RM621m or 21% of its full-year FY10/15 target of RM3bn as the group has a strong line up of new projects for the year. These include Eco Terrace in Penang, Eco Tropics and Eco Business Park 3 in Johor, and Eco Sanctuary in the Klang Valley. We believe Eco Terrace should do well as it is the group's first project in Penang while Eco Sanctuary should also enjoy strong response due to its strategic location and positioning as the group's new high-end lifestyle showcase project. Dato' Chang highlighted that interested buyers should seriously consider properties in Eco Sanctuary as management is confident of its success.
What You Should Do
Investors should continue to accumulate Eco World as it is one of the few developers that should be able to buck the subdued outlook for properties in 2015 due to the implementation of the Goods and Services Tax (GST) starting 1 Apr. The company's marketing prowess can be considered one of the best, if not the best in the industry, and its ambitions are not limited only to Malaysia.
Source: CIMB Daybreak - 24 April 2015
Target RM2.60 (Stock Rating: ADD)
Eco World's large group session and one-on-one meetings at Invest Malaysia 2015 were all well attended. The key focus was on its many projects, including its newly acquired landbank in Kuala Lumpur and Penang. We make no changes to our EPS forecasts, Add rating and target price, based on 10% discount to RNAV. Eco World remains one of our top picks in the property sector. Potential re-rating catalysts include robust new sales and strong earnings growth.
What Happened
Eco World presented to a packed group session at Invest Malaysia today. The company was represented by CEO Dato’ Chang Khim Wah and chairman Tan Sri Liew Kee Sin. Dato' Chang's presentation was very comprehensive and touched on the fundamentals of the property sector, progress the company has made since it was set up two years ago, and its recent landbanking efforts, project launches and sales. Tan Sri Liew touched on the London projects of Eco World International and its quick turnaround strategy there.
What We Think
Eco World's restructuring exercise is nearly completed while most of the key landbank it has been eyeing has also been announced and finalised. The main thing for the company now is to focus on execution. We are not concerned that its four months sales from Nov 14 to Feb 15 amounted to only RM621m or 21% of its full-year FY10/15 target of RM3bn as the group has a strong line up of new projects for the year. These include Eco Terrace in Penang, Eco Tropics and Eco Business Park 3 in Johor, and Eco Sanctuary in the Klang Valley. We believe Eco Terrace should do well as it is the group's first project in Penang while Eco Sanctuary should also enjoy strong response due to its strategic location and positioning as the group's new high-end lifestyle showcase project. Dato' Chang highlighted that interested buyers should seriously consider properties in Eco Sanctuary as management is confident of its success.
What You Should Do
Investors should continue to accumulate Eco World as it is one of the few developers that should be able to buck the subdued outlook for properties in 2015 due to the implementation of the Goods and Services Tax (GST) starting 1 Apr. The company's marketing prowess can be considered one of the best, if not the best in the industry, and its ambitions are not limited only to Malaysia.
Source: CIMB Daybreak - 24 April 2015
