PETALING JAYA: Analysts view Eco World Development Group Bhd
’s (EcoWorld) partnership with JLand Group Sdn Bhd (JLG) to jointly develop three projects in Malaysia and Australia as strategic.
They said it would allow EcoWorld to leverage on JLG’s vast landbank in Johor and lay the groundwork for future tie-ups.
EcoWorld entered into three subscription and shareholders’ agreements with JLG’s subsidiary, JLG Investment Holdings Sdn Bhd, to undertake two developments in Iskandar Malaysia, Johor, and one in Sydney, Australia, on a 50:50 basis.
The three projects comprised a residential tower in Macquarie Park, Sydney, with a gross development value (GDV) of RM425mil, a mixed development on 8.44 acres in Larkin, Johor, with a GDV of RM1.02bil, and an industrial park in Ibrahim Technopolis (IBTEC) South, Johor, with a GDV of RM1bil.
Among the proposed joint ventures (JVs), the industrial project in IBTEC has been positively regarded by analysts.
RHB Research said that the IBTEC project would be developed into Eco Business Park 9 @ IBTEC, implying a clear future pipeline of industrial park developments under the group’s portfolio.
“We are upbeat with EcoWorld’s JVs with JLG, as two Iskandar Malaysia projects will strengthen EcoWorld’s presence in the area,” it said in a note to its clients.
The Macquarie Park and Larkin acquisitions are expected to complete by the second half of the financial year ending Oct 31, 2026 (2H26), while the IBTEC project is planned for completion by 1H28.
“The total land cost for the three projects is worth RM300mil, and valuation for the Larkin and IBTEC land is at RM200 per sq ft and RM10 per sq ft, respectively, which is deemed reasonable,” the research house said.
According to RHB Research, the Iskandar Malaysia region has anchored the group’s property sales over the last two years, making up 57% and 50% of sales for financial year 2024 (FY24) and FY25, respectively.
Anticipating minimal near-term impact, RHB Research has maintained its FY26-FY28 earnings estimates.
“Earnings from Macquarie Park will be on completion basis, while development profit from the Larkin project will likely come in only around late FY28.
“As for the IBTEC industrial park project, the maiden launch may take place in 2028-2029,” it said.
The research house has maintained its “buy” call on EcoWorld, with a raised target price (TP) of RM3.06 from RM3.03 to impute contributions from the JVs, implying a 42% upside and a projected FY26 dividend yield of around 4%.
Meanwhile, Maybank Investment Bank Research (Maybank IB) opined that the overall land prices for the three land deals are fair.
The research house is positive on the industrial IBTEC project due to the strong demand outlook for industrial facilities in the Johor-Singapore Special Economic Zone.
“However, we remain ‘neutral’ on the Macquarie project as overseas developments carry longer revenue recognition cycles and foreign-exchange risks,” it said.
It is also cautious on the Larkin development due to increasing competition from nearby high-rise developments, which could cap pricing power and absorption.
Nevertheless, Maybank IB said the partnership could pave the way for further collaborations.
It has revised upwards its FY27 and FY28 earnings forecasts by 0.3% and 1.4%, respectively, based on 10% to 20% pre-tax margins and a five to seven-year development period.
The research house reiterated its “hold” call on the stock with a lifted TP of RM2.29, up from RM2.28.
