EcoWorld surges 4.26% on better earnings, sales record

KUALA LUMPUR (Dec 11): Eco World Development Group Bhd's (EcoWorld) shares rose as much as six sen or 4.26% at mid-morning today on better earnings and sales record achieved in financial year 2015 (FY15).

At 11.20am, the counter was traded at RM1.47, its highest point so far today compared to yesterday's close of RM1.41, valuing it at RM3.36 billion.

Trading volume more than doubled to 1.23 million shares versus the 542,000 shares recorded yesterday.

The property developer told the media yesterday that it achieved its RM3 billion sales target for FY15, after recording total sales of RM3.02 billion for the year under review.

Its net profit for fourth quarter ended Oct 30, 2015 (4QFY15) came in at RM19.69 million or 0.83 sen per share, on a revenue of RM681.94 million.

Its latest quarterly earnings brought its net profit for the year to RM43.95 million or 2.64 sen per share for FY15, on a revenue of RM1.71 billion with gross margins averaging 24%.

In a note to clients today, CIMB Research said EcoWorld's net income came in above expectations. The research house is maintaining its "add" call with an unchanged target price of RM1.90.

"EcoWorld sold RM3 billion worth of properties in FY15, exactly in line with its target. A RM1.58 billion or 53% came from the Klang Valley, while RM1.21 billion or 40% from Johor and RM224 million or 7% from Penang," CIMB head of research Terence Wong said.

"The group is keeping to its sales target of RM4 billion in financial year 2016 (FY16). This is very commendable, given that most developers have suffered lower sales this year and are not optimistic about the outlook for next year," he added.

He noted EcoWorld has two major upcoming projects in FY16, namely the 19.4-acre Bukit Bintang City Centre (BBCC) project next to the major shopping district in Kuala Lumpur worth RM8.8 billion and the 300-acre Eco Marina township in Batu Kawan, Penang, valued at RM10 billion.

"Given the size of these projects and their strategic locations, they are likely to be key contributors to FY16 sales. The 40%-owned BBCC project holds much promise and should draw strong interest once it wraps up a joint venture partner for the 1 million sq ft mall," he said. -- theedgemarkets.com

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