Ecoworld -kiss of life from prince Liew

Ecoworld get revitalizing kiss of life from Prince Charming Liew

Ecoworld -kiss of life from prince Liew

chinesetea

Publish date: Mon, 06 Jan 2014, 07:05 AM

KUALA LUMPUR - Eco World Development Group Bhd seems to have done the impossible — its stock has risen by as much as 14 times over a 12-month period, with hardly any research coverage.

Eco World peaked at RM4.44 last Friday before easing off for a record close of RM4.39 a share.

A year ago, on January 9, Eco World (then known as Focal Aims Bhd) was the ugly duckling among the boisterous Johor-based property developers, trading at a low of 30.5 sen a share.

Then came its “Prince Charming” in the form of 22-year-old Liew Tian Xiong, who offered to buy 164.77 million shares, or 65.05 per cent, of the company for RM230.68 million cash (at RM1.40 a share).

The offer transformed the stock into a swan, expecially since Liew’s partner in the venture was Eco World Development

Holdings Sdn Bhd, whose shareholders include Tan Sri Abdul Rashid Abdul Manaf and Datuk Eddie Leong Kok Wah.

Abdul Rashid and Leong are both former directors of SP Setia, where Liew’s father Tan Sri Liew Kee Sin is the president as well as chief executive officer.

Liew senior is expected to quit SP Setia by May this year and all indications thus far are that he will assume control of Eco World soon after.

“It is part of the reason the stock has been going up and also because of improved earnings at the company level,” said Mercury Securities research head Edmund Tham

A quick check revealed that for the 12 months ended September 30 2013, Eco World’s net profit was up by more than 300 per cent to RM24.26 million from RM7.20 million in the same period the previous year.

Despite the profit increase, Eco World now trades at a price-earnings (P/E) ratio of 45.82 times, data obtained by Bloomberg show.

Meanwhile, SP Setia, the country’s top developer, trades at a P/E ratio of 16.45 times, and its forward P/E ratio for this year is 13.23 times.

The benchmark FTSE Bursa Malaysia KLCI currently trades at a price-to-earnings (P/E) ratio of 17.71 times.

This means that Eco World's earnings must go up at least three times for its P/E ratio to be in line with the market's average.

Analysts say Eco World's premium attraction is its landbank.

Prior to gaining control of the listed entity, the privately-held Eco World had purchased a staggering 1,214ha in Johor and Kuala Lumpur for more than RM600 million, some of it from DRB-HICOM Bhd.

The gross development value of this landbank is estimated at RM30 billion, eclipsing that of some established listed entities'.

Beyond that, the company has been linked to be a proxy of Liew senior, and the controlling stakeholder of DRB-HICOM.

Nothing has materialised thus far, but there is enough spice to keep the market guessing and punters speculating. - Business Times

Full article: http://www.malaysia-chronicle.com/index.php?option=com_k2&view=item&id=209532:eco-world-gets-revitalizing-kiss-of-life-from-prince-charming-liew&Itemid=3

ECOWLD (8206)

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