• Eco World’s full year net earnings of RM129.1m came in-line with ours and consensus estimates.

• Group achieved its RM4.0bn sales target driven by township developments which is 85% of sales.

• Township developments is key to the company’s sales sustaining during the property down-cycle.

• Targeting fairly modest sales growth of 8-10% for FY17/18E.

• Strong unbilled sales of RM6.0bn providing earnings growth and visibility for the next 2 years.

Anchor townships continue to sell well. Group’s sales from Malaysia projects recorded double digit growth of 26% from RM3.0bn to RM3.8bn. The commendable sales growth was led by the Klang Valley region (65%), followed by Iskandar (31%) and Penang (4%).

International sales still managed to sustain. Eco World International’s (EWI) recorded RM2.3bn combined sales for the year from its UK and Australia projects. Despite the Brexit referendum, monthly sales continued to grow to exceed pre-Brexit levels by a sizeable margin.

2017 sales expected to be sustained by anchor township projects in Klang Valley and Iskandar regions. Its strong unbilled sales of RM6.0bn provides good earnings growth and visibility for at least the next two years.

Still has potential. We maintained BUY with a lower TP of RM1.56 (previous RM1.64). This is derived from a blended valuation of PER and PBV of 15x and 1.3x respectively premised on FY17E.

Source: BIMB Securities Research - 9 Dec 2016