Eco World Development Group Berhad (EcoWorld) recorded a core net profit of RM285.6 million for the first half of financial year 2026 (1HFY26), keeping the group on track with market expectations, according to a research report by Kenanga Investment Bank.
The latest earnings accounted for approximately 52% of Kenanga’s full-year forecast as well as consensus estimates.
On a year-on-year basis, EcoWorld’s 1HFY26 core net profit, adjusted for sukuk payments and one-off disposal gains recorded in the previous corresponding period, increased 46%, supported by stronger revenue contributions.
Revenue for the period rose 52%, mainly driven by the recognition of industrial land sales recorded in the first quarter of FY2026.
However, gross profit margin declined to 27.7%, down 1.8 percentage points, due to a less favourable product mix compared with the previous period.
For the second quarter of FY2026 (2QFY26), revenue declined 41% quarter-on-quarter (QoQ) following the absence of the sizeable land sale contribution recognised in the previous quarter.
Despite lower revenue, gross margin improved to 31.3%, expanding 5.7 percentage points QoQ, supported by a stronger product mix and lower-margin impact from the earlier land transaction.
As a result, the decline in 2QFY26 core net profit was contained at 17% QoQ.
EcoWorld has maintained strong sales momentum, achieving RM3.28 billion in sales as of May 2026, representing 82% of its FY2026 sales target of RM4.0 billion.
The achievement surpassed the RM2.99 billion recorded during the same period last year.
Kenanga said the current sales trajectory places EcoWorld in a position to potentially exceed its FY2025 sales achievement of RM4.55 billion, driven by sustained demand for industrial developments.
The group’s industrial pipeline is expected to be supported by upcoming projects including Eco Business Park VIII (EBP VIII), which carries a gross development value (GDV) of RM3.75 billion and is targeted for launch towards the end of FY2026.
This will be followed by Eco Business Park IX (EBP IX) with a GDV of approximately RM1 billion, planned for FY2028.
Following strong market response to its Duduk Series, EcoWorld is preparing to introduce a more premium high-rise residential product, Versione WKND in Iskandar Malaysia.
Kenanga viewed the move as timely amid potential softening demand for affordable housing as lower-income households face pressure from rising living costs.
Meanwhile, EcoWorld’s build-to-lease data centre project for Pearl Computing remains on track for completion by the end of FY2027, with revenue contributions expected from FY2028 onwards.
The project has a total leasing value of RM4.8 billion over 20 years, equivalent to approximately RM240 million annually, providing the group with a stronger recurring income base.
Kenanga maintained its OUTPERFORM recommendation on EcoWorld with an unchanged target price of RM2.35.
The valuation is based on a 40% discount to revised net asset value (RNAV), which remains more favourable than the industry average discount of 50%.
Kenanga said EcoWorld remains attractive due to its strong brand positioning, quality developments, strong resale value and ability to adapt its product portfolio according to market conditions.
The group’s growing exposure to recurring income through leasing projects, particularly the Pearl Computing data centre, is also expected to improve earnings resilience against property sector challenges.
Key risks to the outlook include a slower-than-expected recovery in the domestic property market, changes in mortgage rates, and higher construction costs.
