PETALING JAYA: Eco World Development Group Bhd
(EcoWorld Malaysia) is expected to meet its sales target of RM3.5bil even without data centre (DC) land sales, supported by resilient demand and strong product line-ups.
CGS International (CGSI) Research in a report said it anticipates resilient earnings in the coming quarters backed by progressive recognition of land sales and property unbilled sales.
EcoWorld Malaysia reported a core net profit of RM100.5mil, up 13% year-on-year (y-o-y) for the third quarter of the financial year 2025 (3Q25).
This lifted core net profit for the nine-month period of FY25 (9M25) to RM293.6mil (27% y-o-y rise), coming in within expectations at 73% of both the research house and Bloomberg consensus full-year estimates.
On a y-o-y basis, the higher 9M25 core earnings were mainly driven by higher revenue from both land sales and property sales.
“This is despite the sequential drop in 3Q25 core net profit, weighed down by lower revenue of RM761.9mil (down 13% quarter-on-quarter, up 45% y-o-y) amid lower land sales recognition in the quarter.
“Recall that the group booked in a lumpy recognition of DC land sales in 2Q25 upon handing over the land in Quantum Edge Industrial Business Park to Microsoft,” CGSI Research said.
Still, the research firm said it anticipates resilient earnings in the quarters ahead for EcoWorld Malaysia.
The group’s sales for 10M25 reached RM3.84bil, surpassing its full-year target of RM3.5bil, which is well within expectations, the research house said.
“Notably, even without DC land sales of RM960mil (core property sales: RM2.9bil), we believe the group can meet the sales target supported by resilient demand and strong product line-ups,” CGSI Research said.
The research outfit noted there was minimal recognition of land sales in 3Q25 due to normalised progress billing from the Quantum Edge land sales to Microsoft.
“The overall recognition of the land sales was about 70% as of end-3Q25, with the remaining 30% to be booked in over the next two to three quarters,” CGSI Research said.
The research house said three additional DC land sales are on track for earnings recognition from FY26 onwards. CGSI Research sees these as key drivers of EcoWorld Malaysia’s “accelerated FY26 earnings per share growth”.
“Its near-term launch pipeline remains solid, as the group targets to launch Eco Botanic 3 (240 acres), Eco Business Park VII (1,195 acres) and Eco Radiance (847 acres), as well as two new duduk series apartments in FY26.
“In our view, this reflects the outcome of its disciplined landbank replenishment strategy, which ensures sustainable earnings growth in the long run,” the research house said.
EcoWorld Malaysia also highlighted the strong momentum in its duduk series projects, which is not only boosting high-rise residential sales, but also catalysing the take-up of commercial products (duduk series accounted for one-third of 10M25 commercial product sales).
CGSI Research maintained an “add” call on the stock with an unchanged target price of RM2.58. It said re-rating catalysts include higher new property sales and additional land sales, while downside risks are delays in project launches and lower sales growth.
