ECW: Robust Sales Performance Surpasses Targets, Positive Outlook Maintained
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A leading property developer has achieved its full-year sales target well ahead of schedule, with its third-quarter financial results aligning with expectations. Analysts have maintained a “Buy” recommendation, citing strong sales momentum and a promising pipeline of future projects.
Performance Highlights
The company’s new sales impressively reached RM3.84 billion by the end of 10MFY25, significantly surpassing the management’s full-year target of RM3.5 billion. While third-quarter revenue and earnings experienced a quarter-on-quarter contraction, this was primarily attributed to the recognition of a substantial industrial land sale in the previous quarter and a slight decline in development margins due to the evolving project mix. Despite these factors, the company declared a 2-sen third interim dividend, bringing year-to-date dividends per share to 5 sen. Furthermore, its net gearing saw an improvement, decreasing to 0.53x from 0.55x in 2QFY25.
Strong Sales Momentum and Strategic Growth
Property sales for 3QFY25 stood at RM855 million, contributing to the robust year-to-date performance. Key contributors to the strong sales momentum included developments in Iskandar Malaysia (52% of total sales), Klang Valley (38%), and Penang (10%). By product type, Eco Townships led with 54% of sales, followed by Eco Business Parks and Quantum (32%), and Eco Hubs (15%). Notably, the company has observed increasing international interest, particularly from Taiwanese buyers for its SWNK Houze@BBCC project. This growing interest is largely driven by the company’s value creation initiatives and proactive overseas roadshows.
Future Outlook and Recommendation
The company anticipates a strong market response for its upcoming pipeline launches, including Eco Botanic 3 in Iskandar Puteri and EBP VII in Negeri Sembilan, both scheduled for late 2025. Significant pre-launch interest from both local buyers and foreign industrialists underpins a positive outlook for these new projects. Moreover, solid unbilled sales of RM5.14 billion provide a strong foundation for future revenue recognition, with over RM1 billion from land sales expected to be recognized in FY26. The construction of a data centre in Puncak Alam is also progressing as planned, with completion slated for 2HFY27. Based on these compelling factors, analysts have maintained their “Buy” recommendation and target price.
