PETALING JAYA: Eco World Development Group Bhd is maintaining its FY25 sales target at RM3.5 billion, matching last year’s target.
President & CEO Chang Khim Wah said the target takes into consideration the highly cash generative phase the majority of the group’s matured projects are currently at.
“The focus should be on landbank preservation to increase profit margins and grow long-term returns,” he added.
EcoWorld Malaysia said its future revenue as at Oct 31, 2024 stands at RM3.96 billion, an increase from FY23, which underpins both earnings and cash flow visibility in the near and mid-term.
Regarding the group’s recent acquisitions, Chang said the 240.3 acres in Iskandar Malaysia acquired in FY24 will be developed as Eco Botanic 3.
“Its location right next to Eco Botanic and Eco Botanic 2 will enable it to leverage off the success of the two earlier townships and contribute towards the enhancement of the remaining matured landbank there.”
Chang said the increased patronage from new residents will enhance value creation at Eco Botanic City, boosting demand for the wide range of local and international businesses from fashion & retail, food & beverage, education, edutainment, wellness and many others that are operating at Eco Boulevard and Eco Galleria.
“All this augurs well for the group’s future residential and commercial launches in the locality which is fast becoming the preferred residential address and most vibrant commercial hub in Iskandar Puteri.”
Its other FY24 acquisition of 8.9 acres that is situated next to the group’s matured Eco Sanctuary township in the Klang Valley is being planned for the development of serviced apartments with a commercial component.
The land is located right opposite Se.Ruang D’ Eco Sanctuary, the group’s first duduk development which is completed and fully sold-out. It is also within walking distance to the main commercial precinct.
Eco Sanctuary’s Parque Residences and Eden by the Parque condominiums, with resort style facilities, are located nearby.
“This demonstrates the strong demand that has built up here for a wider range of the group’s Eco Rise and Eco Hubs products, which puts the new project in a good position for its eventual launch.”
At the start of FY25, Eco World entered into several agreements to acquire 847.2 acres of land located right beside Eco Forest and only 6km away from Eco Majestic.
The new land has two access routes to the Lekas Highway through Jalan Broga as well as via Eco Majestic, the group’s first township in the Klang Valley, which is now fully matured with a vibrant and fast-growing commercial precinct known as Eco Majestic City.
Other amenities include University of Nottingham’s Malaysia campus which is situated opposite the land.
The land is close to Broga Hills and the Sungai Tekala Waterfall which offers the group an opportunity to craft a 3rd Eco township.
This will build on, complement, and extend the success of the group’s established presence in the Semenyih corridor, where it now has over 2,400 acres of combined land for development.
Chang said it will also be working closely with SD Guthrie Bhd and NS Corporation to finalise the terms for the joint development of a 1,166-acre industrial park in Bukit Pelandok, Negri Sembilan. The project is expected to help drive the state’s economic growth agenda as well as complement the growth of greater Kuala Lumpur.
He said prospects for the proposed industrial development of Eco Business Park VII on the land, which is situated within the Malaysian Vision Valley 2.0 economic corridor, are very bright.
“This is based on the keen interest we have been receiving from our network of more than 1,400 businesses operating at our existing business parks as well as new inquiries from local and foreign industrialists that we are continually engaging.”
Chang added with so many new projects in the pipeline, combined with the strong demand it has been experiencing across all five revenue pillars, EcoWorld Malaysia’s growth momentum is solidly on track.
CGS International considers the RM3.5 billion FY25 sales target achievable.
“We like EcoWorld for its robust earnings outlook, potential monetisation of landbank, and compelling dividend yields of 3.5% to 3.8% for FY25 to FY27. With an ‘add’ recommendation and a target price of RM2.44, EcoWorld presents a compelling investment opportunity, albeit with a reminder for investors to monitor risks.”
