$ECOWLD / 8206 (ECO WORLD DEVELOPMENT GROUP BERHAD)
Research by Public
Neutral – TP RM1.50

" Achieves Sales Target in 10 Months”

Eco World Development (ECW) reported an RM80.4m (+21.3% YoY, +14.8 QoQ) net profit in 3QFY24, surpassing our and consensus expectation, with YTD (9MFY24) net profit of RM220.1m (+18.3% YoY) already constituting c. 79% of our and consensus full year estimates. The higher profits were mainly due to better margins recorded as gross profit margin improved from 27.2% in 3QFY23 to 31.3% in 3QFY24. The Group’s net gearing ratio as at 31 July 2024 further reduced to 0.21x, from 0.24x in 2QFY24, with cash reaching a record high of RM1.55bn. Encouragingly, its sales momentum continued with pre-sales already at RM3.5bn in 10 months, exceeding FY24 sales target. Unbilled sales remained healthy at RM4.49bn, from RM4.03bn a quarter ago. Separately, Eco World International Berhad (EWI) achieved RM501m sales exchanges plus reserves of RM48m adding up to a total of RM549m in 10 months of FY24. All told, we adjust FY24 upwards by 4.2% after imputing higher margins. Maintain Neutral with TP of RM1.50.

Analyst:
Tan Siang Hing
tan.sianghing@publicinvestbank.com.my