Sugar Baby Analyst: Why Eco World is a Smart Investment? TP RM3.50
$ECOWLD(8206.MY$ is emerging as a highly attractive investment option, particularly with its strategic focus on business parks and its potential in the AI data center sector. With five business parks—four located in Johor and one in Kuala Lumpur—EcoWorld Malaysia is well-positioned to capitalize on both property development and cutting-edge technology trends.
I take off my sugarbaby hat and wear the hat of a research analyst.
1. Strategic Land Disposal and Financial Gains
Earlier, EcoWorld Malaysia announced that its wholly-owned subsidiary, Eco Business Park 6 Sdn Bhd, entered into a conditional sale and purchase agreement with Microsoft Payments (M) Sdn Bhd for the disposal of 123.1 acres of industrial land in Kulai, Iskandar Malaysia, for RM402.3 million.
This land was part of a 403.78-acre landbank that EcoWorld Malaysia acquired from IOI Properties Group Bhd for RM211 million beginning of this year. The purchase price was approximately RM12 per square foot (psf). The disposal price to Microsoft Payments, however, was RM75 psf, significantly higher, demonstrating EcoWorld Malaysia’s greed and ability to squeeze substantial value from Microsoft.
2. Remaining Land and Future Sales Potential
EcoWorld Malaysia still holds a considerable portion of the landbank from the original acquisition. If the net yield of the 404 acres is 66%, EcoWorld still has 144 acres available for sale. Given the strategic location and potential for future developments, this remaining land could be sold at an estimated RM100 psf, translating to a potential cash flow of RM628 million.
Moreover, EcoWorld Malaysia’s other business parks collectively offer an additional 500 acres of land. This expansive landholding provides ample opportunities for future AI data centre development and sales, ensuring sustained revenue streams.
3. The AI Data Center Concept
One of the most exciting prospects for EcoWorld Malaysia is its potential entry into the AI data center market. As the demand for digital infrastructure grows, driven by cloud computing, big data, and the Internet of Things (IoT), AI data centers represent a lucrative opportunity.
If EcoWorld Malaysia invests in building AI data centers, the total build cost is estimated to be around RM10 billion, which is approximately ten times that of Sime Darby’s projects. Assuming a net margin of RM3 billion from these projects, EcoWorld stands to gain significantly. This potential net margin, coupled with the recovery of the initial land price, could see EcoWorld Malaysia making an additional RM3.5 billion.
I sold some warrants end up totally regretted. Took my EPF money and sink in at 58.58sen again.
4. Shareholder Value and Potential Upside
EcoWorld Malaysia has a share base of 3.6 billion on a fully diluted basis. The potential RM3.5 billion profit from the AI data centers, excluding an additional RM1-2 billion from land sales, translates to an uplift of RM1.35 per share. Analysts currently target EcoWorld shares at around RM2, indicating a potential upside of RM1.70 from current levels. $ECOWLD(8206.MY$
EcoWorld Malaysia has a share base of 3.6 billion on a fully diluted basis. The potential RM3.5 billion profit from the AI data centers, excluding an additional RM1-2 billion from land sales, translates to an uplift of RM1.35 per share. Analysts currently target EcoWorld shares at around RM2, indicating a potential upside of RM1.70 from current levels. $ECOWLD(8206.MY$
Unsupported module.
Please view on mobile devices.
Additionally, the warrants issued by EcoWorld could see significant gains, potentially tripling in value. This optimism is reflected in the actions of key stakeholders like Liew Tian Xiong, who continues to purchase warrants.
Unsupported module.
Please view on mobile devices.
5. Conclusion
EcoWorld Malaysia’s strategic land acquisitions, lucrative disposals, and promising future in AI data centers make it a compelling investment. The company’s ability to unlock value from its landbank, coupled with its expansive landholdings and potential entry into the tech-driven AI data center market, positions it for substantial future growth.
Investors looking for a company with a solid track record, strategic foresight, and a foothold in both property development and emerging tech trends should consider EcoWorld Malaysia as a robust addition to their portfolios. With its blend of traditional real estate development and forward-thinking ventures, EcoWorld Malaysia stands poised to deliver impressive returns in the coming years.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
Geek girl who likes data centre. Investing my daddy’s allowance
104Followers
9Following
619Visitors
Follow