ECOWLD: Property Developer Delivers Strong Earnings Beat on Strategic Land Recognition
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A leading property developer has reported robust first-quarter fiscal year 2026 results, significantly exceeding market expectations. The company’s net profit surged to RM156.4 million, marking a substantial 94.7% year-on-year increase and a 23.4% rise quarter-on-quarter. This strong performance already accounts for approximately 45% of the investment bank’s full-year estimates and 29% of the consensus forecasts.
Performance Review
The exceptional earnings were primarily driven by the timely recognition of significant large-tract industrial land sales, totaling an estimated RM960 million, which were completed within the quarter. The company also demonstrated remarkable sales momentum, securing RM2.06 billion in pre-sales up to February 28, 2026. This figure represents 52% of its ambitious RM4.0 billion sales target for FY26, achieved in a record four months. Consequently, unbilled sales saw an increase to RM5.11 billion, while gross and net gearing ratios improved to 0.63x and 0.17x, respectively.
The strong pre-sales were broadly distributed, with 55% (RM1.14 billion) originating from projects in the Central region (Klang Valley and Negeri Sembilan), and 39% (RM0.8 billion) from the Southern region (Iskandar Malaysia), with the remaining 6% from the Northern region (Penang). The commercial segment recorded a 12% year-on-year sales increase, contributing RM298 million via its Eco Hubs pillar. Notably, the maiden industrial project, Eco Business Park VII in Negeri Sembilan, alone secured RM688 million in sales within four months, accounting for 92% of the total industrial segment sales under the Eco Business Park pillar.
Future Outlook
Following the stellar results, the investment bank has revised its FY26-27F earnings estimates upwards by 24-53%. This adjustment reflects anticipated higher gains from industrial land deals and updated billing assumptions. The company is now widely expected to surpass its RM4.0 billion sales target for FY26, mirroring its success in FY25 where it exceeded its target by 30%, achieving RM4.55 billion in pre-sales. Future growth is set to be underpinned by upcoming launches from its township developments, including Eco Botanic and Eco Radiance, alongside continued focus on industrial developments through Eco Business Park VII and the planned Eco Business Park 8, which involves strategic partnerships.
Given the robust financial performance, strong sales pipeline, and strategic project developments, analysts maintain a positive outlook on the company’s prospects, aligning with the “BUY” recommendation for the stock.
