KUCHING: Analysts are giving two thumbs up for Eco World Development Group Bhd (EcoWorld), Guocoland Ltd and Tan Sri Liew Kee Sin entering into a shareholders’ agreement for Eco World International Bhd’s (EWI) upcoming initial public offering (IPO).
EWI is scheduled to be listed on the main board of Bursa Malaysia by the first quarter 2017.
Kenanga Investment Bank Bhd (Kenanga Research) is positive on the progress of EWI’s listing given that EWI has already commenced sale and operations of its overseas property developments.
“EWI stands to benefit from the synergies and strengths from Guocoland and EcoWorld,” it detailled in a note following the news.
To note, Guocoland – which is listed on the Singapore Stock Exchange – is part of Guoco Group (listed on Hong Kong Stock Exchange) which in turn is part of Hong Leong Group.
Guocoland is a strong regional player in Singapore, China, Hong Kong and Vietnam with strong financial backing from their parent and has a long presence in London with about 5,000 hotel rooms including the brands like Thistle, Every and Clermont, to name a few.
Meanwhile, the research team at MIDF Amanah Investment Bank Bhd (MIDF Research) noted that EWI registered sales of 472 million pounds including reserved units in financial year 2016 (FY16) — an improvement of eight per cent against FY15 sales of 436 million pounds.
“Hence, cumulative sales have increased to 1.058 billion pounds as at October 3, 2016,” it calculated. “We gather that 30 per cent of the FY16 sales were secured post Brexit and hence we believe that EWI sales have not been significantly affected by Brexit.”
Kenanga Research equally believed that Brexit was no major deterrent for EWI as post Brexit, the group has managed to secure decent sales momentum from London.
“Year to date, FY16 sales from London is 472 million pounds versis the full FY15 sales of 436 million pounds as London is still viewed as a safe haven for many nationalities given its transparent governance and laws,” it explained.
This led Kenanga Research to remain positive on the news as it has removed the EWI IPO uncertainty due to Brexit.
“We are positive on EcoWorld’s ability to secure GuocoLand as a strategic partner as it has removed the IPO uncertainty due to Brexit. In the long run, we think that EcoWorld’s sales will benefit from the EWI IPO as it will be able to book in the 27 per cent share of sales and profit from EWI international business.”