AmInvest keeps hold call on Eco World

AMINVESTMENT Bank Bhd has maintained its hold call on Eco World Development Bhd with a higher fair value of 75 sen (from 73 sen). 

“We increase our FY20–22 earnings forecasts by 4.1%, 1.7% and 1.1% respectively to reflect the timing of revenue recognition.

“We recently met up with EcoWorld for updates on the company’s plans for 2020. Management expects FY20 to remain stable, supported by an increasing number of maturing projects in Malaysia and overseas,” the research house said in a Jan 9 note.

EcoWorld registered new sales of RM2.7 bil in FY19. The company is maintaining its combined two-year (FY19–20) sales target of RM6 bil.

The research house said: “We believe the outlook for FY20-21 remains stable, supported by unbilled sales of RM3.8 bil for EcoWorld Malaysia and RM1.3 bil for Eco World International (EWI) with an increasing number of maturing projects in Malaysia and overseas. Maintain hold.”

In December 2019, EcoWorld acquired 200 acres of freehold land in Iskandar Puteri for RM1.67 bil in a move to target the M40 group with properties priced between RM300,000 and RM450,000.

The research house added that for overseas projects, particularly in the UK, the property market may have bottomed out and believed uncertainties surrounding Brexit had declined.

“The UK property market has shown price improvement in the past several months. EcoWorld’s 27%-associate Eco World International (EWI) expects to hand over RM3 bil worth of properties (Wardian London, Kew Bridge, London City Island and Barking Wharf) in the UK in 2020. As a result, we shall see stronger earnings from JV and associates for EcoWorld in FY20,” AmInvest said. 

Eco World’s share price opened 3.6% higher at 71 sen before the midday break on Jan 9.

 

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