ECOWLD (8206) - Eco World Development Group Bhd - Restructuring in the home stretch
Target RM2.60 (Stock Rating: ADD)
Eco World's 1QFY10/15 net profit was broadly in line with expectations and made up 8% of our full-year forecast. New sales amounted to only RM440m in 1Q but should meet the full-year target of RM3bn as sales pick up in future quarters due to new launches. The group will be launching four new projects this year - Eco Terrace, Eco Tropics, Eco Business Park 3 and Eco Sanctuary. We retain our EPS forecasts, Add recommendation and target price basis of 10% discount to RNAV. Eco World remains one of our top picks in the property sector, with the completion of the restructuring exercise, strong sales in upcoming quarters and landbanking as key catalysts.
1Q results in line
1QFY15 was broadly in line with expectations even though net profit met only 8% of our full-year forecast. We expect future quarters to be much stronger, driven by strong unbilled sales which stand at RM3.06bn currently. Eco World did not declare interim dividends, in line with expectations.
1Q sales of RM440m
Eco World sold RM440m worth of properties in 1Q. RM215m came from Johor (Eco Spring RM160m, Eco Tropics RM26m, Eco Botanic RM24m and Eco Business Park I RM5m) and another RM225m came from the Klang Valley (Eco Majestic RM196m, Eco Sky RM18m and Saujana Glenmarie RM12m). The sales were largely in line with expectations as Eco World is targeting to sell RM3bn worth of properties in FY15 and RM4bn in FY16. With four new projects to be launched, we believe it is on track to meet its sales target.
Restructuring exercise
Eco World's share price went ex of the 1-into-2 share split in Jan and ex of the 1-for-2 rights issue with 4 free warrants-for-5 rights shares in Mar. In Feb, the group completed the acquisition of landbank from Eco World Sdn Bhd for RM3.8bn. The only outstanding component of the restructuring exercise now is the 20% private placement, which should be completed in 2Q15. With the restructuring finally almost completed, Eco World’s management can fully focus on operational issues and drive the company to greater heights.
Source: CIMB Daybreak - 20 March 2015
Target RM2.60 (Stock Rating: ADD)
Eco World's 1QFY10/15 net profit was broadly in line with expectations and made up 8% of our full-year forecast. New sales amounted to only RM440m in 1Q but should meet the full-year target of RM3bn as sales pick up in future quarters due to new launches. The group will be launching four new projects this year - Eco Terrace, Eco Tropics, Eco Business Park 3 and Eco Sanctuary. We retain our EPS forecasts, Add recommendation and target price basis of 10% discount to RNAV. Eco World remains one of our top picks in the property sector, with the completion of the restructuring exercise, strong sales in upcoming quarters and landbanking as key catalysts.
1Q results in line
1QFY15 was broadly in line with expectations even though net profit met only 8% of our full-year forecast. We expect future quarters to be much stronger, driven by strong unbilled sales which stand at RM3.06bn currently. Eco World did not declare interim dividends, in line with expectations.
1Q sales of RM440m
Eco World sold RM440m worth of properties in 1Q. RM215m came from Johor (Eco Spring RM160m, Eco Tropics RM26m, Eco Botanic RM24m and Eco Business Park I RM5m) and another RM225m came from the Klang Valley (Eco Majestic RM196m, Eco Sky RM18m and Saujana Glenmarie RM12m). The sales were largely in line with expectations as Eco World is targeting to sell RM3bn worth of properties in FY15 and RM4bn in FY16. With four new projects to be launched, we believe it is on track to meet its sales target.
Restructuring exercise
Eco World's share price went ex of the 1-into-2 share split in Jan and ex of the 1-for-2 rights issue with 4 free warrants-for-5 rights shares in Mar. In Feb, the group completed the acquisition of landbank from Eco World Sdn Bhd for RM3.8bn. The only outstanding component of the restructuring exercise now is the 20% private placement, which should be completed in 2Q15. With the restructuring finally almost completed, Eco World’s management can fully focus on operational issues and drive the company to greater heights.
Source: CIMB Daybreak - 20 March 2015
