Eco World's Net Gearing To Stay Healthy Post-stake Acquisition In Paragon Pinnacle -- Investment Banks
KUALA LUMPUR, Feb 19 (Bernama) -- Eco World Development Group Bhd’s net gearing is expected to remain healthy after acquiring the remaining 40 per cent stake in Paragon Pinnacle Sdn Bhd from the Employees Provident Fund’s unit Tanjung Wibawa Sdn Bhd for RM184.08 million, said two investment banks.
Eco World, in a filing with Bursa Malaysia on Tuesday, said that following the acquisition, the group now fully owns Paragon Pinnacle, which is undertaking the development of Eco Grandeur and Eco Business Park V, located in Puncak Alam.
MIDF Amanah Investment Bank Bhd said the acquisition of the remaining stake in Eco Grandeur and Eco Business Park V is positive for Eco World as it gains full ownership of the two projects.
“Hence, Eco World will be able to recognise full earnings contribution from the two projects,” it said in a research note today.
Eco Grandeur is Eco World’s township with a remaining landbank of 310.39 hectares and a remaining gross development value (GDV) of RM7.6 billion, while Eco Business Park V has a remaining landbank of 111.28 hectares and a remaining GDV of RM1.96 billion.
These two projects delivered a decent performance with cumulative sales of RM4.4 billion.
Hence, MIDF Amanah revised its target price (TP) from RM2.01 to RM2.09 and maintained a “buy” call on Eco World as the prospect for the group remains positive with earnings catalyst from its industrial development and Quantum pillar.
Meanwhile, Maybank Investment Bank Bhd adjusted its financial year 2025 (FY2025), FY2026 and FY2027 earnings forecasts by two per cent, one per cent and four per cent, respectively, to account for the recent stake acquisition.
“With full ownership of Eco Grandeur and Eco Business Park V, our revised net asset value estimate increases by 12 sen to RM3.04 per share.
“Meanwhile, FY2025 net gearing is projected to increase to 0.3 times post-stake acquisition from 0.27 times.
“We continue to like Eco World for its hands-on management, proven track record and leading position in the property sector,” said the investment bank in a separate note.
As at 10.34 am, the counter increased four sen to RM1.96, with 2.94 million shares transacted.
-- BERNAMA