Exceeding targets
Ecoworld Malaysia big on keeping earnings consistent
HAVING secured sales of Rm1.26bil in the first four months of its current financial year ending Oct 31, 2024 (FY24), Eco World Development Group Bhd (Ecoworld Malaysia) is on track to achieve, if not surpass its target for this year.
For FY24, the goal is to hit Rm3.5bil in sales.
The property developer, now into its second decade, has a proven track record of meeting its annual targets, says president and chief executive officer Datuk Chang Khim Wah.
“Ecoworld Malaysia celebrated its 10th anniversary in FY23 and it has been an amazing journey since we launched our first project, Eco Botanic, in Iskandar Malaysia back in 2013,” he says in a video presentation to shareholders in conjunction with the group’s AGM.
“As a group, we have achieved total cumulative sales of Rm31.9bil over the last decade, averaging close to Rm3.2bil sales per annum. This not only met but consistently exceeded our annual sales targets,” he adds.
Chang says the stellar results reflect the group’s strategic decision to transform and evolve beyond its roots as a township developer.
“Today, we are a multifaceted real estate player with a diverse range of products and services across four revenue pillars.
“This has enabled us to serve all categories of customers from the residential (both landed and high-rise) to commercial and industrial markets.”
The group’s four revenue pillars are its Eco Townships (comprising landed homes amid lush greenery and comprehensive lifestyle amenities); Eco Rise (consisting of a growing range of high-rise residential developments); Eco Hubs (shops and strata offices, as well as retail spaces); and Eco Business Parks (consisting of several industrial business parks developed to serve the needs of local and international industrial businesses).
Eco Townships, says Chang, is the group’s most well-known pillar among buyers and investors.
“Over the past 10 years, we have delivered approximately 17,300 units of landed homes to customers from all walks of life, who are very appreciative of the worldclass eco living we have worked hard to create for them and their families.”
Additionally, Chang says the group’s Eco Business Parks (EBP) pillar has seen exponential growth.
“This pillar registered Rm1bil in sales in 2023 with a 68% compounded annual growth rate recorded over the last four years.
“We believe this momentum will continue, given the strength of demand we are seeing from both local and multinational industrialists.”
The company has three business parks in Johor, namely, EBP1 (Tebrau), EBP2 (Senai) and EBP3 (Pasir Gudang). Its other business park, EBP5, is located in Puncak Alam, Selangor.
The group plans to set up its fifth business park (EBP6) in Kulai, Johor.
Separately, Chang says the group’s Eco Rise pillar covers a growing range of high-rise residential developments within its townships and Bukit Bintang City Centre, as well as its popular and affordable “duduk” apartments.
“Since 2017, we have handed over more than 8,500 units of serviced apartments. This pillar is set for accelerated growth, with more than 5,900 units of service apartments planned to be completed over the next few years.”
Ecoworld Malaysia introduced the duduk series in 2020 with the aim of providing attainable homes without compromising its residents’ lifestyle needs.
“Our duduk series of apartments anchors the Eco Rise revenue pillar. It was introduced to serve first-time homeowners and younger purchasers.
“Following the sold-out success of our first two duduk apartments in the Klang Valley, we have launched other duduk products at our matured Eco Townships in Penang and Iskandar Malaysia,” says Chang.
With the group’s Se.duduk D’ Kajang, Chang says Ecoworld Malaysia’s duduk brand now extends beyond its Eco Townships.
“Based on the very positive pre-marketing response received, we believe this project will be a success, which opens up interesting possibilities for further growth of our Eco Rise pillar beyond our own developments.”
Separately, Chang says the group’s Eco Hubs pillar serves the commercial market.
“The group’s matured and highly populated developments, plus the success of our placemaking efforts, have attracted large numbers of purchasers for every launch of our strata and shop offices.
“Currently, together with our joint-venture partners, we are managing approximately two million sq ft of commercial spaces in the Klang Valley, Iskandar Malaysia and Penang.”
Boosting growth
To grow the pillars further, Chang says Ecoworld Malaysia had acquired three parcels of land in 2023 and 2024.
“The first was a small parcel of land in Kajang for the Se.duduk D’ Kajang development, with an estimated gross development value of Rm500mil.
“We also acquired 404 acres of land in Kulai, Iskandar Malaysia, which is planned for the development of EBP6, which will enable us to capture a bigger share of the rising industrial demand.”
In January this year, Chang says the group acquired a piece of land in Iskandar Puteri.
“This new land is planned for the launch of Eco Botanic 3, which is strategically located right next to our matured Eco Botanic and Eco Botanic 2 townships.”
Chang says the two acquisitions down south will further strengthen the group’s market leading position in Iskandar Malaysia, which, he believes, is currently the fastest growing property hotspot in the country.
“With the new land acquisitions, the group’s undeveloped landbank has increased to 3,454 acres. Around 49% of this landbank is situated in the Klang Valley, 45% in Iskandar Malaysia and the balance 6% in Penang.
“Our plans for our remaining lands are also well balanced and diversified between our four revenue pillars,” he says.
Over the past 10 years, Chang says the group’s Eco Townships have anchored Ecoworld’s business with Rm18bil landed residential homes sold.
“More recently, our Eco Business Parks have seen tremendous growth with Rm4.4bil sales recorded.
“The Eco Rise and Eco Hubs pillars are also doing well, contributing more than Rm4.5bil sales each over the last 10 years.”
Moving into the group’s second decade, Chang says the increasing size and strength of each revenue pillar will provide Ecoworld Malaysia with four separate, yet complementary engines to drive its future performance.
“It also gives us the flexibility and agility to adapt and adjust our annual product launches to serve whichever market segment that is experiencing the most robust demand.”
“Today, we are a multifaceted real estate player with a diverse range of products and services across four revenue pillars.”
Datuk Chang Khim Wah
Steady track record
In the first quarter ended Jan 31, Ecoworld Malaysia’s net profit rose 22.15% to Rm69.6mil compared with Rm57mil posted in the same quarter last year.
The higher profit was mainly due to higher interest income earned from the placement of excess funds by the group.
Revenue grew by 11% to Rm537.8mil against the Rm484.7mil achieved last year, while earnings per share climbed to 2.36 sen from 1.94 sen previously.
Over the past three years, Chang says sales have exceeded Rm3.5bil annually.
“In FY23, we achieved Rm3.61bil sales with strong contributions by every revenue pillar and geographic region.
“As at Oct 31, 2023, the group’s future revenue remains healthy at Rm3.49bil, which provides us with clear, near and mid-term earnings and cashflow visibility,” he says.
With the increasing maturity of the group’s development portfolio, Chang says Ecoworld Malaysia has entered a highly cash-generative phase of its project lifecycle.
“This has contributed to the record Rm1.36bil cash and bank balances as at Oct 31, 2023, even as total borrowings were pared down to Rm2.5bil.”
As a result, the group’s net gearing further reduced to 0.25 times, the lowest level attained in 10 years, says Chang.
“The strong operating cashflow we have been generating enabled us to further increase dividends to our shareholders, with a total of six sen per share declared for FY23 – which was three times higher than the amount we started with in FY20.”
For FY24, Chang says Ecoworld Malaysia is maintaining its sales target at Rm3.5bil.
“This will enable the group to focus on pursuing sustainable growth, by improving absolute returns from our valuable landbank, whether via margin improvements or higher yield per sq ft of land developed.
“Our aim is to extend the life of our matured landbank to reap the rewards of our investments in value creation, thus improving our capacity to continue rewarding our shareholders with good dividend payments in the years to come.”