EcoWorld gains 3% after JV with EPF to undertake RM15 bil project

KUALA LUMPUR (Nov 16): Shares in Eco World Development Group Bhd (EcoWorld) jumped as much as 3.01% in morning trades today, after teaming up with Employees Provident Fund (EPF) in relation with a mixed development project worth RM15 billion. 

As at 10.34 a.m., the counter gained four sen or 3.01% to trade at a high of RM1.37, versus its closing price of RM1.33 yesterday.

A total of 1.58 million shares changed hands between RM1.35 and RM1.37. The current price values it at RM3.66 billion. 

The property developer told the local bourse yesterday that it was in collaboration with EPF to jointly develop a piece of 2,198.4-acre (890ha) leasehold land in the northwestern Klang Valley corridor in Kuala Selangor, into a mixed project worth an estimate of RM15 billion.

The development entails a mixed residential and commercial development, "Eco Grandeur" and an integrated business park, "Eco Business Park V", which will be developed by its unit Paragon Pinnacle Sdn Bhd. Affordable homes will also be built on some 280 acres to be known as "Laman Indah", including Rumah Selangorku homes.

In a note to clients today, MIDF Research said it is positive of the news, as EPF's subscription into EcoWorld's unit Paragon Pinnacle Sdn Bhd  (PPSB) will reduce EcoWorld's capital commitment on the project.

"Hence, EcoWorld financial year 2017 (FY17) net gearing should remain manageable," according to the research firm. 

MIDF Research is retaining its "Buy" call, with unchanged target price of RM1.68. 

"Pending the completion of the deal, we maintain our earnings forecast for both FY16 and FY17. We continue to like EcoWorld for its excellent sales achievement, superior earnings growth prospects and strong branding," it said. — theedgemarkets.com