Eco World Development Group  may fall further after breaching
the MYR1.77  level  in  its  latest  session.  Traders  may  expect  further
weakness if the stock stays below  this  level  in the near term, 
with the next support level anticipated at MYR1.54. The stock may move sideways
  or rebound further  if  it  recovers back above the MYR1.77level, 
while the bearish bias may be removed if the MYR2.00 level is surpassed.

Source: RHB

Raring to go

• 1QFY15 results within expectations

• RM621m sales secured as at Feb15; on track for

RM3bn sales in FY15

• RM3.1bn unbilled sales to drive earnings growth

• Maintain Buy and RM2.35 TP (ex-rights)

Highlights

Results in line

• ECW reported 1QFY15 earnings of RM3.1m, on the back of

RM158m revenue. This includes contribution from Eco

Majestic, Eco Sky, Eco Botanic and Eco Business Park 1

effective 8 Jan 2015, when the massive corporate exercise

to acquire the development rights of eight projects for

RM1.8bn became unconditional.

Outlook

Sales going strong

• ECW achieved RM621m sales as at Feb15, of which 53%

came from Iskandar Malaysia (IM). This underpins the

unrivalled market confidence towards ECW’s launches,

which continue to be well-received despite the challenging

market at IM. Meanwhile, unbilled sales stood at RM3.1bn,

offering strong earnings visibility

• The Group will be launching four new projects in FY15: Eco

Sanctuary@Shah Alam (RM8bn GDV), Eco Terraces@Penang

(RM340m), Eco Tropics@IM (RM3.4bn) and Eco Business

Park 3@IM (RM2bn). We believe it is on track to achieve

RM3bn sales target this year given its focus on lifestyle

township development, where the initial registrations for its

upcoming launches have received overwhelming response.

• With the completion of the acquisition of development

rights, ECW currently owns 4,950 acres of land bank worth

RM55bn GDV which are strategically located in property

hotspots in the Klang Valley, Penang and Johor.

Valuation

We retain our RM2.35 TP, which is based on 20% discount to

our RNAV (prior to 20% placement). We continue to like ECW

for the proven and impeccable track record of its key senior

executives, who have helped the developer to establish strong

branding among property buyers.

Malaysia Equity Research

20 Mar 2015