ECOWLD (8206) : Eco World Development Group Bhd - Strong start to maiden year
Target RM7.60 (Stock Rating: ADD)
Eco World's 12MFY9/14 results were below expectations as net profit made up 53% of our original 13MFY10/14 forecast. Note that the company changed its year-end from Sep to Oct, and will be releasing its 13-month results next month, while holding an analyst briefing on the same day. New sales for the group, including those from assets to be acquired, amounted to a massive RM3.2bn, 60% ahead of its RM2bn target. We lower our FY14-15 EPS for the results and the slight delay in completion of the asset acquisition exercise. No changes to the target price basis of parity to RNAV. The stock remains an Add and one of our top picks in the property sector, with the restructuring exercise, better-than-expected new sales, and continual landbanking as key catalysts.
Finals in line
FY9/14 results were below expectations as net profit made up only 53% of our 13MFY10/14 forecast. Eco World will report 13 months results on 10 Dec and host an analyst briefing on the same day. Investors should also look beyond FY14 to FY15 onwards, when contribution from the new assets are due to start. Eco World’s shares are expected to go ex for the split, free warrants and rights issue sometime in Jan, a slight delay from the original Oct/Nov deadline. We have adjusted our FY15 EPS lower after assuming only 9 months’ contribution from the new assets. No dividends were declared, in line with expectations.
RM2bn sales target exceeded
Including property launches from Eco World Sdn Bhd, Eco World sold around RM3.2bn worth of properties in 13MFY10/14, RM1.2bn or 60% above its target. This is very impressive considering that the sales came largely from only six projects - two in the Klang Valley (Eco Sky and Eco Majestic), and four in Johor (Eco Botanic, Eco Tropics, Eco Spring and Eco Business Park 1).
Subscribing to SPAC
Recall that on 16 Oct, Eco World said it was interested in subscribing to 30% of Eco World International (EWI), a special purpose acquisition company (SPAC), for RM562.5m. EWI is proposing to undertake a listing on the Main Market of Bursa Malaysia sometime in 2015. EWI will focus on overseas property projects, particularly in Australia and the United Kingdom, thus allowing Eco World to concentrate its resources on Malaysia. The management team of EWI includes Tan Sri Liew Kee Sin, who is also a director of Eco World.
Source: CIMB Daybreak - 21 November 2014
Target RM7.60 (Stock Rating: ADD)
Eco World's 12MFY9/14 results were below expectations as net profit made up 53% of our original 13MFY10/14 forecast. Note that the company changed its year-end from Sep to Oct, and will be releasing its 13-month results next month, while holding an analyst briefing on the same day. New sales for the group, including those from assets to be acquired, amounted to a massive RM3.2bn, 60% ahead of its RM2bn target. We lower our FY14-15 EPS for the results and the slight delay in completion of the asset acquisition exercise. No changes to the target price basis of parity to RNAV. The stock remains an Add and one of our top picks in the property sector, with the restructuring exercise, better-than-expected new sales, and continual landbanking as key catalysts.
Finals in line
FY9/14 results were below expectations as net profit made up only 53% of our 13MFY10/14 forecast. Eco World will report 13 months results on 10 Dec and host an analyst briefing on the same day. Investors should also look beyond FY14 to FY15 onwards, when contribution from the new assets are due to start. Eco World’s shares are expected to go ex for the split, free warrants and rights issue sometime in Jan, a slight delay from the original Oct/Nov deadline. We have adjusted our FY15 EPS lower after assuming only 9 months’ contribution from the new assets. No dividends were declared, in line with expectations.
RM2bn sales target exceeded
Including property launches from Eco World Sdn Bhd, Eco World sold around RM3.2bn worth of properties in 13MFY10/14, RM1.2bn or 60% above its target. This is very impressive considering that the sales came largely from only six projects - two in the Klang Valley (Eco Sky and Eco Majestic), and four in Johor (Eco Botanic, Eco Tropics, Eco Spring and Eco Business Park 1).
Subscribing to SPAC
Recall that on 16 Oct, Eco World said it was interested in subscribing to 30% of Eco World International (EWI), a special purpose acquisition company (SPAC), for RM562.5m. EWI is proposing to undertake a listing on the Main Market of Bursa Malaysia sometime in 2015. EWI will focus on overseas property projects, particularly in Australia and the United Kingdom, thus allowing Eco World to concentrate its resources on Malaysia. The management team of EWI includes Tan Sri Liew Kee Sin, who is also a director of Eco World.
Source: CIMB Daybreak - 21 November 2014
