RHB Research has maintained its Buy call on Eco World Development Group Bhd (EcoWorld), with an unchanged target price of RM2.66, representing a potential upside of 37%, as it expects stronger fourth-quarter earnings from data centre land sales.
In its latest research report, RHB said EcoWorld’s third-quarter FY2026 results were in line with expectations. Although earnings declined quarter-on-quarter, the research house expects performance to improve in the final quarter, supported by higher progress billings from data centre land transactions.
EcoWorld’s property sales reached RM4.05 billion in the first 10 months of FY2026, surpassing management’s full-year target of RM4 billion. Including the recent RM1.01 billion land disposal to Tera Data Centres (Malaysia) Sdn Bhd, total sales rose to RM5.06 billion.
The southern region remained the largest sales contributor at RM1.97 billion, accounting for 49% of total sales during the 10-month period.
Industrial properties contributed 33% of sales, while township projects accounted for 40%. Eco Botanic 3 in Iskandar Malaysia was the largest residential contributor, generating RM967 million in sales.
RHB noted that Eco Business Park 7 in Negeri Sembilan had attracted approximately RM800 million in sales of industrial lots and ready-built factories to local industrial and manufacturing companies since its launch in November 2025, indicating sustained domestic demand.
The research house expects EcoWorld’s fourth-quarter earnings to benefit from the remaining RM300 million to RM400 million worth of data centre land sales, while the recent RM280.8 million land sale to KNBDC is expected to be recognised in the first half of FY2027.
EcoWorld’s future revenue to be recognised stood at RM5.01 billion as at August 2026.
Meanwhile, RHB said management reaffirmed that Malaysia remains its primary focus for landbanking, with the recent Singapore acquisition described as an opportunistic investment. The Singapore project is targeted for launch in FY2028.
EcoWorld declared a third interim dividend of two sen per share, bringing its total dividend for the first nine months to six sen. Net gearing remained unchanged at 0.25 times.
RHB maintained its FY2026–FY2028 earnings forecasts and projected a dividend yield of approximately 4% for FY2026.
