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GuocoLand to buy 27 pct stake in Malaysia's Eco World Int'l during IPO

* GuocoLand, Eco World parent to hold 27 pct stake each after IPO
* Eco World International eyes IPO in March

Oct 27 GuocoLand will buy a 27 percent stake in Malaysian property developer Eco World International during its IPO, as the Singapore-listed firm, controlled by tycoon Quek Leng Chan, seeks geographical diversification of its property business.

Eco World International, which owns properties in the UK and Australia, is aiming to list on Bursa Malaysia in March 2017 and raise more than 2 billion ringgit ($478.47 million).

As strategic investor and co-anchor of the initial public offering (IPO), GuocoLand will buy shares in the offering to give it the 27 percent stake, the two companies said in separate statements on Thursday.

The companies did not disclose the deal value or indicative pricing of the IPO.

Quek, one of the richest men in Malaysia, co-founded conglomerate Hong Leong Group, which operates financial services, manufacturing, distribution, property and infrastructure development.

"With a substantial exposure to Asia, GuocoLand has been on the lookout for investment opportunities in other markets," GuocoLand's group CEO Raymond Choong said in a statement.

"The UK and Australia property markets offer scalability, and we believe that with the right products and locations, they offer reasonable returns," he said.

Eco World International's parent company Eco World Development Group will be the other co-anchor, holding a 27 percent stake after the IPO.

Malaysia's IPO market has been slow in recent years as its currency took a hit from sustained volatility in global commodity markets. The Southeast Asian IPO market has also been muted, as global economic headwinds dented investor sentiment.

The Eco World IPO had initially been scheduled for September, but was delayed to accommodate GuocoLand's entry as a strategic investor.

The deal will accord first right status to GuocoLand to partner Eco World International in projects based in Singapore, China and the UK, though both groups can at the same time pursue developments on their own in the three markets.

Eco World International currently has three ongoing projects in London worth a total estimated gross development value of 2.2 billion pounds ($2.69 billion) and one Sydney development with an estimated gross development value of 318 million Australian dollars ($242.67 million), it said.

The Brexit vote has not had a significant effect on their London projects, though there was a lull in transactions in July and August, according to Eco World International executive vice chairman Liew Kee Sin.

Source: Reuters

Guocoland takes up 27% stake in Eco World International IPO

Source: The Star

http://www.thestar.com.my/business/busi ... ional-ipo/

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Eco World International fair value RM1.33

KUALA LUMPUR: Kenanga Investment Bank Research has advised investors to subscribe to Eco World International IPO with a target price of RM1.33 – which is 13 sen above its retail offer price of RM1.20.

It said on Friday that at RM1.33, this was 23% below is fully diluted sum-of-parts of RM1.72 which includes gross development value (GDV) replenishments of RM8bil.

“Our applied discount is considered an industry low given that its existing projects have achieved strong take-up rates while we believe their GDV replenishments can be easily launched quickly given their strong execution capabilities,” it said.

To recap, the EWI IPO will raise RM2.58bil based on 2.15 billion shares at a retails IPO of RM1.20 out of the enlarged share base of 2.40 billion shares, implying a market capitalisation of RM2.88bil, which it deems as large cap developer.

The IPO comes with a bonus warrant issue of up to 960 million. Utilisation of proceeds is mainly for debt repayment, working capital and future land acquisitions.

Key shareholders are Tan Sri Liew Kee Sin (10.3%), Eco World Development Group Bhd (27.0%) and Guocoland (27.0%).

Leading the management team are Liew (executive vice chairman) and Datuk Teow Leong Seng (ED/president & CEO) who are known for previously managing SP Setia.

Guocoland is part of Hong Leong Group and a strong regional player with established presence in London. Under the shareholder's agreement, Guocoland has priority to be a project partner if EWI requires a partner to undertake any developments in China, Singapore and UK.

EWI projects will be marketed under the“EcoWorld” brand. Total GDV of RM13bil of which 92% are in London, which are a 75:25 JV between EWI and Ballymore while the remainder is in Australia.

Their projects have achieved rapid take-ups backed by strong local buyers. The London and Australia projects have secured 60% and 80% pre-sales (Jan 31, 2016) since the launch in 2015 amounting to RM6.5bil.

The bulk of buyers are largely locally driven with London seeing 54% local buyers while Australia sees 49% which indicates strong sales sustainability.

Expect maiden bullet earnings contributions by FY18 at RM165mil with stronger growth in FY19E of RM552mil based on its estimated FY17, FY18 and FY19 cumulative sales of £1.55bil, £2.11b and £2.34b, respectively.

“We expect investors to look beyond FY17, which is expected to still be in the red as their projects are only be recognised upon completion. Note that their London projects are recognised at share of JV levels resulting in no visible revenue until West Village is completed. No dividends are expected at this juncture.

“EWI will be in a net cash position post IPO and debt repayment. The group is likely to embark on more JV structures like Ballymore group to avoid over taxing its balance sheet while allowing for rapid expansions.

“Furthermore, considering how fast EWI has secured the earlier four projects, we estimate GDV replenishments of RM8bil over the next 12-18 months,” it said.


Source: The Star

http://www.thestar.com.my/business/busi ... e-rm1pt33/

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TA Securities: EWI share price fair at RM1.34

PETALING JAYA: TA Securities considers property developer Eco World International Bhd’s (EWI) share price as “fair value” at RM1.34 apiece on the company’s favourable prospects driven by a strong management team and established branding.

EWI has launched its prospectus en route to a listing early next month. The retail offering has been priced at RM1.20 per share with the institutional price to be determined via a book-building exercise.

EWI, set to be Malaysia’s biggest listing this year, will see an initial public offering (IPO) of 2.2 billion new shares, which make up 89.7% of the enlarged issued and paid-up capital of the company.

“All in, the IPO is expected to raise gross proceeds of up to around RM2.6bil.

“EWI is poised to remain in the red in the financial year ending Oct 31, 2017, due to a mismatch between the initial expenses incurred and revenue recognition for projects in the United Kingdom, which are based on the completion method.

“Nevertheless, we expect EWI to enjoy bumper earnings in 2018 and 2019, driven by lumpy revenue recognition of its London projects.

“We have arrived at a fair value of RM1.34 per share for EWI, based on 1.1 times the 2018 price-to-book (P/B) value after ascribing a 22% premium to the Malaysian developers’ average P/B of 0.9 times.

“We think this is justifiable, considering EWI’s favourable prospect driven by a strong management team and established branding,” said TA Securities in a report.

It was reported that the property developer had secured two of the country’s biggest institutional funds – the Employees Provident Fund and Permodalan Nasional Bhd – as cornerstone investors.

EWI owns a 75% stake in three ongoing property development projects in London and a 100% stake in an ongoing property development project in west Sydney, Australia.

The combined gross development value of these projects is estimated at RM13bil.

TA Securities said that out of the RM2.6bil proceeds, 52.9% or RM1.4bil would be used for debt repayment within six months.

“The remaining RM1.1bil or 43.6% will be earmarked for working capital to fund EWI’s existing four projects, namely, Wardian, Embassy Gardens and London City Island in London, as well as West Village in Parramatta, Sydney,” it said.

Meanwhile, EWI posted a narrower loss of RM6.06mil for the first quarter ended Jan 31 compared with the same quarter a year ago when it posted a loss of RM57.80mil mainly due to unrealised foreign-exchange differences as a result of the appreciation of the pound sterling.

The company said in a stock exchange filing that revenue was higher in the quarter under review on fees for marketing services rendered by a subsidiary for a joint venture in respect of sales of the second phase of the London City Island and Wardian London projects.

Source: The Star

http://www.thestar.com.my/business/busi ... -at-rm134/

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Eco World International’s IPO oversubscribed nearly 9 times

BY M. HAFIDZ MAHPAR

Of the 449.5 million shares, 47.3% or 212.4 million IPO shares were allocated to three cornerstone investors: Permodalan Nasional Bad, Retirement Fund Inc (KWAP) and Employees Provident Fund Board.

This represented about 8.9% of the enlarged issued and paid-up share capital of EWI.

EWI’s existing projects in London and Sydney were performing well and as of Jan 31, the company had secured total sales of RM6.49bil out of a total estimated gross development value.

Source: The Star

http://www.thestar.com.my/business/busi ... y-9-times/

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Eco World Int'l makes strong debut on Bursa Malaysia

by AMIR HISYAM RASID

KUALA LUMPUR: Eco World International Bhd (EWI) made a firm debut on the Main Market of Bursa Malaysia today.

It opened at RM1.31, which is 11 sen above its offer price of RM1.20, with about 14.29 million shares changing hands.

Its warrants opened at 30.5 sen, with 4.12 million shares done.

EWI's initial public offering (IPO) is the largest listing in Malaysia since June 2015, with total proceeds of RM2.58 billion raised.

Its IPO was anchored by two strategic investors – Eco World Development Group Bhd and GuocoLand Ltd, with 27 per cent stakes each.

Its cornerstone investors include Permodalan Nasional Bhd, Retirement Fund Inc and the Employees Provident Fund Board.

Source: New Straits Times

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4Q Results

Revenue: -39%
Losses: RM 56m
NAV: RM 1.17

https://www.bursamalaysia.com/market_in ... id=3219231

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FY22F new property sales target at RM2bn

FY10/21 core earnings came in below expectations on weaker-than-expected
new property sales and JV contribution.

EWI sets a RM2bn FY22F new property sales target, which could be a tall
order without BTR deal conclusion, in our view. Reiterate Hold.

TP: 0.47

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 17EC2EAB2D

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Eco World International's 4Q net loss narrows to RM37.69mil, declares 6c div/share

RM1.18bil sales plus reserves of RM114mil for a total of RM1.3bil in its 2023 financial year (FY23).

Distribution of the RM792mil dividend in September 2023

Over the entire financial year, the group recorded a net loss of RM85.37mil, lower than the net loss of RM234.42mil in FY22, while revenue was RM104.8mil in FY23 as compared to RM159.96mil in the previous year.

Source: The Star

https://www.thestar.com.my/business/bus ... c-divshare

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Eco World International (ECWI MK)

Another dividend windfall in FY24E
Losses in line but sales fell short
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ECWI’s 4QFY23 core net loss of MYR27m (vs. MYR54m/MYR26m net loss in 4QFY22/3QFY23) was in line.

FY23 property sales and reserved sales of MYR1.3b were 7% below its MYR1.4b sales target for FY23.

ECWI has set a MYR850m sales target for FY24 and will likely pay another MYR600m (25sen
/shr) as dividend in FY24.

We lower our FY24/25E loss projections by -51% to -60%.

Our new TP is MYR0.26 (-8sen; on unchanged 0.6x FY24E PBV).

ECWI will stay in losses until it decides to launch new projects. HOLD.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/356597.pdf