Ekovest Bhd

[winston]

vested

UOB Kay Hian sees near-term impact on Ekovest share price

PETALING JAYA: UOB Kay Hian Research foresee negative near-term impact on Ekovest Bhd share price following its proposal to takeover of Iskandar Waterfront City Bhd (IWC).

“Ekovest’s proposal to acquire a 62% stake in IWC comes as a negative surprise. The proposal could see Ekovest forking out up to RM764mil cash for the stake (at RM1.50 per share).

“While the proposal would need to be deliberated by the board (and approved by shareholders), we foresee negative near-term impact on share price. Downgrade to ‘sell’ with a lower target price of RM1.04,” UOB Kay Hian said in a report.

At 11.40am, Ekovest tumbled 16.38%, or 19 sen to 97 sen with 251.3 million shares done.

Ekovest has received a proposal letter from Tan Sri Lim Kang Hoo, the major shareholder of Ekovest, in relation to a reorganisation exercise which involves Ekovest acquiring all the ordinary shares in IWC held by the existing shareholders of IWC, excluding shares held by Iskandar Waterfront Holdings (IWH).

Minorities own approximately 62% of the issued and paid-up share capital of IWC. The proposal would see Ekovest offering minorities of IWC for either a cash consideration of RM1.50 per share, or swap one IWC share for Ekovest share at RM1.50 per share.

Currently, about 62% of IWC is held by minorities, worth about RM713mil (based on IWC’s share price of RM1.40).

UOB Kay Hian said the proposal to merge the two entities came as a “negative surprise”. It said assuming that the minorities take up the cash offer (instead of the share swap), Ekovest would have to fork out up to RM764mil in cash for the 62% stake.

“Acquisition implies a P/B of 1.5 times but is at a 65% discount to company’s assessed market value of lands which sits on 1,052 acres in Johor. Nevertheless, acquisition of assets which cannot be monetised in the near term even at big discounts is negatively perceived by institutional investors,” the research house said.

Assuming only cash acceptances are received, UOB Kay Hian said Ekovest’s gearing would rise up to 1.1 times (from 0.8 times), and could cost the group RM38mil in financing cost per year (at a 5% rate).

While equity fundraising could be an option, EPS would be diluted given the long-term nature of IWC’s business, which focuses mainly on land disposals, making earnings delivery rather lumpy.

Additionally, it said Ekovest’s prospective PE could rise to 18.5 times assuming 50% of IWC shareholders accept share swap.

“We downgrade Ekovest to ‘sell’ after raising our SOTP discount to 50% (from 30%), anticipating a potential negative reaction to shareholders sentiment post proposal announced.

“Nevertheless our target price could potentially be revised upwards (but not fully restored) should the deal be blocked and no longer pursued by management,” UOB Kay Hian said.

Source: The Star

https://www.thestar.com.my/business/bus ... are-price/

[winston]

vested

Kang Hoo has his say

By Tee Lin Say

IWC is turning profitable in its upcoming third quarter to September.

There are also cashflows coming in from IWC’s existing property business and the payment from the land we sold to the Greenland Group.

The first payment for Lot 1A has come in on July 15. That will be reflected in our September results”.

“The vendor is the Shanghai government, so these are solid paymasters. They will be paying us in tranches from now until May 2020”.

Lim controls more than 50% of Ekovest and 38% of IWH.

For the second quarter to June 30, IWC turned around with a small profit of RM147,000 from a previous loss of RM3.82mil. Revenue dropped to RM12.51mil from RM21.41mil previously.

For the six-month period, it recorded losses of RM56.31mil from a previous loss of RM8.61mil. This was on the back of 11.07% drop in revenue to RM26.16mil.

As for the Greenland deal, recall that back in 2015, IWC had proposed to sell three pieces of land measuring 51.8ha in Plentong, Johor, held by IWC subsidiary Tebrau Bay Sdn Bhd, to Greenland Tebrau Sdn Bhd (GTSB) for RM2.37bil cash.

Based on the schedule of payments starting July 15, 2017 until May 5, 2020, GTSB needs to pay a grand total of RM2.13bil. The first payment of RM46.32mil for Lot 1A was completed on July 15. The entire Lot 1A will be completely paid by July 15, 2018, and cumulatively, IWC should have received RM231.62mil by then.

China-based Greenland is also IWC’s partner in a waterfront city project in Johor with an estimated gross development value of RM18.4bil.

Ekovest shares, which are currently priced at 99 sen, should theoretically be trading at RM1.50 should shareholders decide to exchange their IWC shares for Ekovest shares instead.

Source: The Star

https://www.thestar.com.my/business/bus ... s-his-say/

[winston]

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Ekovest, IWCity climb on hopes of Bandar Malaysia revival

Source: The Star

https://www.thestar.com.my/business/bus ... 5iZLRRR.99

[winston]

not vested

IWCity and Ekovest say not involved in reinstated Bandar Malaysia project

The government, on Friday, announced that it would reinstate the Bandar Malaysia project, that was terminated by the previous administration in May 2017.

The revised RM140bil development project will be awarded to the original consortium of Iskandar Waterfront Holdings Bhd and China Railway Engineering Corp Sdn Bhd (IWH-CREC).

The consortium has 60 days to make an advance payment of RM500mil in addition to the original deposit sum of RM741mil within 60 days from the date the project was reinstated.

The consortium will take up a 60% stake in Bandar Malaysia Sdn Bhd, with the government holding the remaining 40% stake.

Source: The Star

https://www.thestar.com.my/business/bus ... ia-projec/

[winston]

not vested

Ekovest falls 4.1% on plan to buy land from Iskandar Waterfront

by Nazuin Zulaikha Kamarulzaman

KUALA LUMPUR (Nov 22): Ekovest Bhd shares fell 4.1% in morning trades today following the group's proposal to buy 20 parcels of freehold development land in Johor Bahru for a total of RM1.05 billion from Iskandar Waterfront Holdings Sdn Bhd (IWH).

In a filing with Bursa Malaysia yesterday, the group said it has entered into two conditional agreements with IWH, via its wholly-owned unit Timur Terang Sdn Bhd.

The first agreement is to acquire 17 parcels of freehold development land measuring a total of 30.49 hectares (75.34 acres) for RM869.69 million, which will be satisfied through the issuance of irredeemable convertible preference shares worth RM849.89 million, and a cash payment of RM19.8 million.

The second agreement is to buy three parcels of land measuring 6.32 hectares (15.61 acres) for RM180.2 million, which will be fully satisfied in cash, Ekovest said.

The cash portion of RM200 million for the proposed acquisitions will be funded via internal funds, Ekovest added. As at June 30, 2019, Ekovest's cash and bank balances stood at RM830.07 million.

Source: The Edge

https://www.theedgemarkets.com/article/ ... waterfront

[winston]

not vested

Ekovest is expected to create significant shareholder value via its outstanding proposal to become the holding company of controlling shareholder Tan Sri Lim Kang Hoo’s stable of listcos and property assets and separately via the eventual monetisation of its Duke highway concessions.

Multiple corporate reorganisations and acquisitions are gradually taking shape.

The group is undertaking multiple corporate exercises including:
a) the merger of Knusford and its own construction arm,
b) the acquisition of lands along RTS Bukit Chagar line for potential transit-oriented developments (TOD) 2 & 3,
c) the acquisition of at least 51% or up to 70% stake in Credence, and
d) the IWH-IWC merger.

These exercises allow Ekovest to streamline its operations, eliminate many of the existing recurrent-related party transactions as well as tap into the rising vibrancy of Johor’s property market.

Maintain BUY with a target price of RM0.98, based on a 50% discount to SOTP of RM1.95 (largely anchored by highways valuation), factoring in the gestation period for the SPE highway.

Despite near-term challenges from its capital-intensive highway business and restructuring exercise, we remain optimistic about Ekovest's outlook, driven by a potential DUKE highway monetisation (which will take a longer time to materialise).

We believe the completed takeover of four highway concessionaires in 2022 by Amanat Lebuhraya Rakyat (ALR) and the recent Prolintas IPO may set the precedent for Ekovest’s management to consider monetising its DUKE highway similarly.

SHARE PRICE CATALYST

Potential monetisation of DUKE highways to unlock enormous investment value.

Despite a lack of clarity, there is increasing likelihood of the monetisation of highways amid
the government’s commitment to fulfilling their earlier promises to abolish highway tolls in
stages.

The potential monetisation can be a major re-rating catalyst since DUKE Phase 1 and Phase 2 could command a lucrative equity value of RM3.1b or enterprise value of RM4.6b (on a 60% basis), about 2x above Ekovest’s market cap, while generating disposal gains of RM2b-3b.

Source: UOBKH

[winston]

not vested

Ekovest Bhd - Highway to profitability

2024-01-11

Price Target: 1.16

Ekovest Bhd (8877) is a diversified company with activities spreading across the construction, property, toll operation, and plantation segments.

As a prominent contractor and toll highway concessionaire, Ekovest is set for profitability by FY25, benefiting from Johor's vibrant property and construction sectors plus potential gains from the monetisation of DUKE highways and improvements across its business segments.

BUY with a TP of RM1.16 based on our SOP valuation.

Source: Rakuten

https://klse.i3investor.com/web/priceta ... arch/70061

[winston]

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Clarification on the Recent Article by the Edge Ekovest may be dropped as River of Life PDP dated 15 July 2024 ("the Article")

Ekovest was appointed as the PDP of the ROL Project to the Government in year 2012 and our contractual role was officially concluded in January 2015.

Ekovest’s contracted role was to mainly provide horizontal coordination with up to 42 agencies while the respective agencies under multiple ministries spearhead the River of Life project. Under the PDP contract, Ekovest was authorised by the government solely to tender/participate for beautification works within the ROL Project (via Swiss Challenge).

Ekovest has fully discharged all of its duties as the PDP to the Government for the ROL Project on 3 January 2015.

https://www.bursamalaysia.com/market_in ... id=3464148

[winston]

not vested

Ekovest, Iskandar Waterfront climb in active trade on 10-year development plan in Johor worth RM4.33b GDV

By Justin Lim

IWCity's 10-year development plan comprising three projects in Johor Bahru, with an aggregate gross development value (GDV) of RM4.33 billion.

IWCity said its 10-year development plan comprises the RM3.5 billion waterfront township Tebrau Bay, RM500 million mixed waterfront development Danga Rivera, and RM330 million mixed-use development project Danga Heights.

Over the next five years, the first phase of the three key development projects, comprising an aggregate of 63 acres, is expected to generate a total GDV of RM1.8 billion, according to the company.

IWCity said the 100-acre Tebrau Bay is a waterfront township development, which will commence with a 30-acre pilot phase. Meanwhile, Danga Heights is a 29.3-acre mixed-use development project focused on retail, which will include a branded hotel, office and serviced apartment.

As for Danga Rivera, the project is a mixed waterfront development in Permas Jaya, which will feature shop offices, retail spaces, hotels and service suites.

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/703441

[winston]

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3Q Results

Revenue: +39%; RM 306m
Losses: RM 11m
Net Asset: RM 0.80

https://www.bursamalaysia.com/market_in ... id=3452838