It was certainly a good run for Tan Sri Lim Kang Hoo’s counters Ekovest Bhd and Iskandar Waterfront City Bhd (IWCITY). Investors are probably expecting better fortunes to come Lim’s way especially if the government finally revives the RM100 billion high-speed rail (HSR) link project.

The rail project would be realigned to run through Forest City, a controversial property development fronting the Straits of Johor comprising four artificial islands on reclaimed land. While the Transport Minister Anthony Loke has said the country will not be bringing back the HSR, Johor’s Sultan Ibrahim Sultan Iskandar gas said he will ‘make it (come back) on’.

Who will prevail? The next Yang di-Pertuan Agong or the government? Only time will tell after Sultan Ibrahim is installed as Malaysia's king on Jan 31, 2024.

If the HSR project is back on, Ekovest and IWCITY will benefit tremendously. Recall that both the counter fell amid news in Jan 2021 that the Kuala Lumpur-Singapore High Speed Rail (HSR) will be terminated, as both countries could not reach an agreement.

IWCITY is the master developer of the Bandar Malaysia mixed development project, which will house one of the HSR stations. Ekovest was supposed to acquire a 40% stake in IWH-CREC Sdn Bhd, the main player in the Bandar Malaysia development.

IWH-CREC is a 60:40 joint venture between Iskandar Waterfront Holdings Bhd and China Railway Engineering Corp. However, Ekovest announced in July 2021 that it will not proceed to buy into the Bandar Malaysia project, This was after the restated and amended share sale agreement executed between TRX City and IWH-CREC had lapsed.

As such, with the possibility of the HSR being turned back on, Ekovest and IWC are getting a huge boost, at least in investors’ confidence.

On Dec 11, Ekovest gained 6.8% to close at 47 sen while IWC rose 18.3% to 62 sen on active trade. On a YTD basis, Ekovest had surged 34.3% while IWCITY jumped 127.8%.  Already, Ekovest has performed commendably in the first quarter ended Sept 30. Its net profit increased to RM3.1 million from RM182 million a year ago.

This was despite a decline in revenue to RM271.9 million versus RM322.9 million. It has been diversifying into other businesses to reduce dependency and reliance on its existing businesses in construction, property development and toll operations.

As for IWCITY, in 3QFY23 (ended Sept 30), the property developer managed to return to the black with a small net profit of RM176,000 while revenue jumped to RM23.8 million from RM17.5 million.

In term of chartwise, both EKOVEST and IWCITY showing a potential reversal after a deep pullback. Notably, IWCTIY show stronger setup as price is trading and holding well above 20 & 40 MA. The reversal come with high volume, price are likely going to retest resistance level (No Buy Call)