Maybank IB maintains ‘buy’ on Eco World

KUALA LUMPUR: Maybank Investment Bank (IB) Research has trimmed its FY16/17/18 net profit forecasts for Eco World Development Group Bhd by 0.6%/1.2%/3.8% respectively to factor in slower take-up  assumptions for Eco Terraces and Eco Marina.

“We prefer Eco World’s southern and central projects over its Penang projects given its stronger hold in these areas and their more strategic locations,” it said.

Maybank IB said the while it was pleasantly surprised by the strong take-up at Eco Meadows, it remained cautious on Eco World’s Paya Terubong project. As for Eco Marina, the project could take a longer gestation period as Batu Kawan (BK) was still at its infant stage.

“We trim our FY16-18 net  profit forecasts by 1%  to 4%.  Our RNAV- target price is  largely  unchanged  at RM1.67 (-1sen; 40% discount to RM2.79 RNAV estimates),” it said, adding that it had maintained its “buy” call on Eco World.

Maybank IB said Eco Meadows’ landed residential were selling  well, thanks to its affordable price tag  (below RM1mil per unit for landed properties) and right products. All non-bumi lots were fully sold and management is looking to launch the shop units soon. As for Eco Marina, phase 1 comprising landed residential will be launched by early 2017.

“We are neutral on Eco Marina (RM10bil  GDV; 17%  of  total  GDV; 6.2%  of  our  RNAV estimates) as the gestation period could be longer since Batu Kawan is still at its infant stage,” it said.