EcoWorld's Singapore land buy seen bearing fruit from FY29

KUALA LUMPUR: Eco World Development Group Bhd's (EcoWorld) latest acquisition of a prime residential site in Singapore is expected to contribute to the group's earnings from financial year 2029 (FY29) onwards, RHB Research said.

EcoWorld secured the site for S$208.1 million (about RM667.6 million) through a tender managed by Singapore's Urban Redevelopment Authority (URA).

RHB Research said although the bid price was slightly on the high side, it viewed the acquisition positively, citing the site's strategic location and surrounding amenities, including renowned schools, parks and a Mass Rapid Transit station.

"We estimate a gross development value of RM1.3 billion for this project," it said in a note, adding that demand for EcoWorld's project there is expected to be encouraging given its strategic location.

RHB Research said the company's projects in Iskandar Malaysia, such as Eco Botanic, Eco Spring and Eco Business Parks, should also provide ample cross-selling opportunities.

The firm maintained its "Buy" call on the stock but lowered its target price (TP) to RM2.66 from RM2.78.

"We lower our TP to reflect the volatile geopolitical conditions in the Middle East, as well as near-term local political uncertainty," it said.

Meanwhile, Public Investment Bank Bhd (PublicInvest) said the land deal is expected to be completed by end-2026, with EcoWorld planning to launch the project in 2028 under its Versione series.

"Pending more details, we keep our earnings estimates unchanged for now," it said.

PublicInvest maintained its "Neutral" call on EcoWorld with a TP of RM2.10, citing the company's consistent profit delivery and decent dividend yield.

The TP represents about a 20 per cent premium to book value, it said.