Johor’s Iskandar Malaysia was EcoWorld Malaysia’s largest contributor, accounting for 63% of total year-to-date (YTD) sales, followed by the Klang Valley (27%) and Penang (10%), said Public Investment Bank (PublicInvest).
The outsized contribution to the developer’s sales from its Johor projects stems primarily from its industrial developments and land sales to multinationals for data centre projects.
In a report yesterday, PublicInvest noted that EcoWorld Malaysia has exceeded its FY2024 sales target, raking in RM3.5 billion sales YTD, driven by the industrial segment again which “performed better than expected”.
“We understand that its industrial segment outperformed with RM1.05 billion sales achieved as at Aug 31, 2024, exceeding the full year record of RM1.04 billion achieved in FY2023,” it said.
Just last month, EcoWorld Malaysia launched Quantum, the latest in its industrial park series, catering to the slew of high-tech investments flowing into the country, particularly Johor.
The first park under the Quantum concept is the Eco Business Park VI in Kulai, Johor, which will be rebranded as Quantum Edge.
PublicInvest said the 403-acre Quantum Edge has already recorded RM626 million sales up to Aug 31, 2024.
“We understand it has secured a sale of 57 acres to Asia’s leading data centre provider, Princeton Digital Group, for RM223.8 million on top of its first sale of 123 acres to Microsoft Payments (Malaysia) Sdn Bhd for RM402.3 million,” it said.
The investment bank maintained its “hold” call on the developer with a target price (TP) of RM1.50.
Boost from Microsoft
Kenanga Research said its recent land sale to Microsoft could open the door for more buyers – both local and international – as Microsoft’s presence could help catalyse business activities in the surrounding areas.
“EcoWorld Malaysia may close the year with RM4.5 billion sales arising from further reception across all fronts, supplemented by its new high-tech industrial pillar, Quantum.
“The group is on the lookout for new landbanks, mainly in the Klang Valley and Iskandar Malaysia, backed by a strong war chest with a net gearing of 0.31 times,” it said.
Kenanga said it likes EcoWorld Malaysia for its strong branding, responsiveness to changing market conditions, and timely move to tap into Johor’s booming industrial scene.
However, the research house kept its “sell” call as the group’s valuations have become fair after the recent run-up in its share price, which has surged 68% YTD.
It has a price target of RM1.41, a 22.1% discount from its closing price of RM1.81 yesterday, valuing the group at RM5.3 billion.
Its net profit for the third quarter ended July 31, 2024 (Q3 FY2024) rose to RM80.44 million from RM66.34 million a year ago as revenue grew 10.35% to RM526.22 million from RM476.85 million.
Its cumulative net profit for 9M FY2024 rose 18.32% to RM220.12 million from RM186.03 million in the previous year while revenue grew 17.17% to RM1.62 billion from RM1.38 billion.