• Solid sales of RM6.49b due to strong management team

• Strategic location and innovative projects

• Synergy from its strategic investor - Guocoland

• Expect positive earnings from FY18 onwards

• Non Rated with Fair Value of RM1.30

Solid sales of RM6.49b due to strong management team. In less than two years after the project launch, EWI has achieved cumulative sales of RM6.49b. This is a good testimony of management ability to generate sales and hence profit in the long term for investors. EWI is helmed by Tan Sri Dato' Sri Liew Kee Sin (Executive Vice Chairman) and Dato’ Teow Leong Seng (President and CEO). Tan Sri Liew has in depth knowledge of property development field with 28 years of experience.

Strategic location and innovative projects. We gather that its projects in London (London City Island Phase 2, Embassy Gardens Phase 2, and Wardian) have easy access to public transport and road networks. Additionally, EWI’s projects have distinctive and differentiated features. London City Island Phase 2 has the distinctive feature of “Arts & Cultural Destination” as it is the home of the English National Ballet. As for Embassy Gardens Phase 2, it has the distinctive feature of “Floating” transparent sky pool. Lastly, the Wardian London project has the distinctive feature of innovative landscaping with “The Wardian Cases” in which each apartment enjoys a fully-fledged garden.

Synergy from its strategic investor - Guocoland. We believe that the subscription of 27% stake in EWI from GuocoLand Limited (GuocoLand) will bring in long term synergy for EWI. The Company has total assets exceeding SGD7.9b with property operations in Singapore, China, Malaysia and Vietnam comprising residential, hospitality, commercial and retail developments. In our view, potential coinvestment between EWI and Guocoland is possible in the future particularly in Singapore, China and the UK.

Expect positive earnings from FY18 onwards. We expect EWI to register net loss of RM107m in FY17 before net profit of RM181m in FY18. As for FY19, earnings is expected to surge to RM432m. Key factor affecting the volatility of earnings is the recognition of revenue and profit in the UK and Australia which is based on completion method.

Fair Value of RM1.30 based on 15% discount to EWI’s estimated Fully Diluted Revalued Net Asset Valuation (FD RNAV) per share of RM1.53. The 15% discount is same as our SPSETIA’s discount to RNAV. We believe that SPSETIA is the nearest comparison as it has property development projects in UK via Battersea Power Station

Source: MIDF Research - 20 Mar 2017