Eco World International to record positive earnings from FY18 onwards

KUCHING: Eco World International Bhd ( Eco World International) is expected by analysts to record positive earnings from financial year 2018 ( FY18) onwards.

According to the research arm of MIDF Amanah Investment Bank Bhd ( MIDF Research), in less than two years after the project launch, Eco World International has achieved cumulative sales of RM6.49 billion.

“This is a good testimony of management abi l ity to generate sales and hence profit in the long term for investors,” it said.

MIDF Research gathered that Eco World International’s projects in London ( London City Island Phase 2, Embassy Gardens Phase 2, and Wardian) have easy access to public transport and road networks.

The research arm noted that Eco World International’s projects have distinctive and differentiated features.

“London City Island Phase 2 has the distinctive feature of ‘Arts & Cultural Destination’ as it is the home of the English National Ballet.

“As for Embassy Gardens Phase 2, it has the distinctive feature of ‘Floating’ transparent sky pool,” the research arm said.

It added that the Wardian London project has the d i s t inc t ive fe atur e of innovative landscaping with “The Wardian Cases” in which each apartment enjoys a fullyf ledged garden.

MIDF Research bel ieved that the subscription of 27 per cent stake in Eco World International from GuocoLand Limited ( GuocoLand) wi l l bring in long term synergy for Eco World International.

“The company has total assets exceeding S$ 7.9 billion with property operations in Si ng ap or e , Ch i n a , Mal aysi a and Vietnam compr i sing resident i a l , hospi tal i ty, commercial and retail developments,” it said.

In the research arm’s view, pot ent i a l co- investment b e twe en Eco Wo r l d International and Guocoland is possible in the future particularly in Singapore, China and the UK.

On earnings est imates, MIDF Research expected Eco World International to register net loss of RM107 million in FY17 before net profit of RM181 million in FY18.

As for FY19, earnings is expected by the research arm to surge to RM4 32 million.

“Key factor affecting the volatility of earnings is the recognition of revenue and profit in the UK and Australia which is based on completion method,” it said.

All in, MIDF Research’s fair value of RM1.30 per share.