Date: October 2, 2024
Broker: UOB Kay Hian
Company Overview
EcoWorld Development Group Berhad (ECW) is a leading property developer in Malaysia, recognized for its significant role in the Iskandar Malaysia development region.
Strategic Position
- Market Leadership: EcoWorld is seen as a market leader in Iskandar Malaysia, with developments that cater to both residential and commercial buyers. The company has effectively leveraged the strategic location of Iskandar Malaysia, particularly its proximity to Singapore, to attract cross-border investments.
Development Projects
- Key Developments: Since launching Eco Botanic in 2013, EcoWorld has expanded its portfolio with notable projects including Eco Business Parks and Eco Tropics, aligning its developments with Iskandar Malaysia’s economic transformation.
Growth Potential
- Landbank: EcoWorld has a substantial landbank in Iskandar Malaysia, totaling 1,529 acres with a gross development value (GDV) of RM13 billion. The company holds 3,426 acres in total, with significant remaining GDV of RM52 billion.
Industrial Sector Focus
- Business Parks: The company has five business parks, four in Iskandar Malaysia and one in the Klang Valley, comprising a total industrial landbank of 1,176 acres with a GDV of RM5.8 billion. EcoWorld’s industrial segment has demonstrated remarkable sales growth since FY20, achieving a four-year compound annual growth rate (CAGR) of 68%.
Strategic Initiatives
- QUANTUM Initiative: EcoWorld is launching QUANTUM, a new industrial revenue pillar focused on data centers and high-tech ventures. This initiative aims to create a favorable environment for industrialists in the data center and digital sectors, capitalizing on the growing demand in these areas.
Investment Recommendation
- Target Price: Maintain a BUY recommendation with a target price of RM2.10, reflecting EcoWorld’s strong market positioning, growth potential, and the anticipated demand in Iskandar Malaysia’s industrial sector. The target price is based on a 40% discount to its revised net asset value (RNAV) of RM3.42, suggesting a valuation that is attractive relative to its growth prospects.
