Eco World International Bhd (ECWI) saw its share price rise in early morning trading following its decision to end a collaboration agreement with Eco World Development Group Bhd (EcoWorld Malaysia), which had limited its ability to pursue property investment and development opportunities in Malaysia.
As at 10am, ECWI’s shares were up four sen to 25.5 sen, with 8.31 million shares changing hands.
The agreement, signed in 2016, had imposed geographical restrictions on both parties. ECWI was barred from undertaking property ventures in Malaysia, while EcoWorld Malaysia was restricted from expanding overseas, except via ECWI.
Maybank Investment Bank Bhd (Maybank IB) viewed the termination of the agreement positively, noting that the move enables ECWI to pivot back to a more stable and predictable property market.
“This marks a strategic shift that allows ECWI to re-enter a more stable and visible Malaysian property market, especially in contrast to its current exposure in London and Australia, where market challenges have put all planned launches on hold,” Maybank IB said in a note.
The bank added that ECWI could now leverage its strong balance sheet to tap into local opportunities, reduce earnings volatility, and potentially collaborate again with EcoWorld Malaysia in new projects.
According to Maybank IB, ECWI plans to raise around RM500 million over the next 18 to 24 months by monetising its unsold property inventory and land assets in London, estimated to be worth about RM230 million. The proceeds would be used to fund potential land acquisitions in Malaysia.
With its return to the local market, ECWI may also reassess its dividend commitments between 2025 and 2026. Maybank IB is maintaining its earnings forecast and target price of 27 sen for the company.
–Bernama
