Eco World Development Group Bhd 
(March 20, RM1.93)
Maintain add with unchanged target price of RM2.60. Eco World Development Group Bhd’s first quarter of financial year 2015 (1QFY15) results were broadly in line with expectations even though net profit met only 8% of our full-year forecast. 

We expect upcoming quarters to be much stronger, driven by strong unbilled sales which stand at RM3.06 billion currently. 

Eco World did not declare any interim dividends, in line with expectations.

Eco World sold RM440 million worth of properties in 1Q. A sum of RM215 million were from Johor (Eco Spring RM160 million, Eco Tropics RM26 million, Eco Botanic RM24 million and Eco Business Park I RM5 million), while another RM226 million came from the Klang Valley (Eco Majestic RM196 million, Eco Sky RM18 million and Saujana Glenmarie RM12 million). 

The sales were largely in line with expectations as Eco World is targeting to sell RM3 billion worth of properties in FY15 and RM4 billion in FY16. 

With four new projects to be launched, we believe Eco World is on track to meet its sales target. 

Eco World’s share price went ex for the 1-into-2 share split in January and ex for the 1-for-2 rights issue with 4 free warrants-for-5 rights shares in March. 

In February, the group completed the acquisition of land bank from Eco World Sdn Bhd for RM3.8 billion. 

The only outstanding component of the restructuring exercise now is the 20% private placement, which should be completed in 2Q15. With the restructuring finally almost completed, Eco World’s management can fully focus on operational issues and drive the company to greater heights. — CIMB Research, March 20

This article first appeared in The Edge Financial Daily, on March 23, 2015.