In the limelight. Eco World Development Group (EW; previously known as Focal Aims; ECW MK; Not Rated) has been in the limelight after the buyout by Eco World Development Holdings S/B (EWDH) and Liew Tian Xiong (son of SP Setia‟s CEO Tan Sri Liew Kee Sin). The buyout effectively makes EW the listed vehicle for EWDH (unlisted), a fast-growing developer led by former top managers at SP Setia. It has accumulated 3,000 acres of land (worth MYR30b in GDV) throughout Malaysia in less than a year. EWDH is currently undertaking a restructuring exercise that could involve strategic land bank injection into EW (probably by 1H14), in our understanding.

To recap, EWDH and Liew Tian Xiong entered into a conditional SSA with various EW (Focal Aims) shareholders to acquire 164.8m shares, or a 65.1% stake in EW (Focal Aims), for MYR230.7m cash or MYR1.40/share, sometime in Sep 2013. The whole exercise (including MGO) was completed in Nov 2013 and the Johor-based developer changed its name to EW effective from 23 Dec 2013.        More on EW and EWDH. EW is the developer of Kota Masai, an integrated township development located at Masai, Iskandar Malaysia, and Saujana 0-lot (a high-end landed property project) at Glenmarie, Selangor, while EWDH is an emerging property group built up by former SP Setia (SPSB) directors and executives. Major shareholders include Tan Sri Abdul Rashid Abdul Manaf and Datuk Eddie Leong Kok Wah.    

Anymore value? No further information has been provided at this juncture as management is currently undertaking a corporate restructuring. Our back-of-the-envelope estimate shows a potential RNAV/share enhancement of MYR3.74 from the land injection (+MYR2.24) and revaluation of the Masai land (+MYR1.50). Key assumptions include (i) total land cost of MYR3b (10% of the reported MYR30b GDV), (ii) WACC/pretax margin of 10%/20%, (iii) 15-year development period, (iv) issuance of 673m new shares to fund the land injection based on MYR4.46 current pricing and (v) Kota Masai land revalued at MYR15psf (existing asking price for land in the Masai area).