• Building an empire of urban traffic dispersal system . Listed in 1993, Ekovest is principally involved in construction, property development and toll road operations. The major shareholder of Ekovest is Tan Sri Lim Kang Hoo and family, who collectively own ~40% of the group. Apart from Ekovest, Lim is also a major shareholder of listed property developer Iskandar Waterfront City Bhd (IWCITY with ~47% shareholding).
   
• Ekovest is the concession holder and main contractor of the DUKE Highway (DUKE 1, 2 & 3), which collectively costs RM6.3bn. In Feb17, it disposed a 40% stake in DUKE 1 and 2 to EPF for RM1.13bn, valuing the concessions (DUKE 1 & 2 only) at RM2.83bn or RM1.32/share (7.6% higher against 10 May closing). Ekovest has indicated that it plans to list its expressway concession business. It is currently working towards the listing for DUKE as early as 2018 with the aim of raising ~US$500m.
   
• The group has a sizeable orderbook of RM5.6bn, excluding Duke 2A. The construction work on its DUKE toll roads Phase 2-3 amount to RM4.3bn and forms the biggest portion of Ekovest's construction order book. Building construction work for its property project and river beautification work for the River of Life project account for the rest of its orderbook. Its order book could increase further by 113% or RM6.3bn if it includes the construction of DUKE-Phase 2A, which is expected to be carried out by its construction division To recap, Ekovest received a letter in Jan 2017 from the Government on the principle approval of the proposed privatisation of the Kampung Baru Link, Istana Link and Kapar Link Expressway. Overall, if the DUKE master plan is executed as planned, the construction of subsequent expressways under DUKE master plan could potentially provide construction earnings visibility for another 5 to 10 years.
   
• Sitting on a large prime landbank in Klang Valley. Ekovest has 76 acres undeveloped landbank located at prime areas in the Klang Valley (39 acres), Danga Bay, Johor (25 acres) and Kuantan (12 acres). It has been developing lands in Cheras (12.0 acres) and Titiwangsa (27 acres) with a combined GDV of RM7.8bn over 10-years development period. The group has an intention to retain the shopping mall in Cheras and Titiwangsa developments for recurring income. In longer term, the group is exploring the option of REITing the shopping malls to unlock the value of the property.

Source: Hong Leong Investment Bank Research - 12 May 2017