GuocoLand’s stake in Eco World gets a ‘yes’ vote

SINGAPORE (Oct 28): GuocoLand’s participation in Eco World Development Group’s planned IPO of Eco World International (EWI) has CIMB maintaining its “add” call with a target price of S$2.59 (RM7.81).

In a Thursday note, lead analyst Lock Mun Yee notes that the shareholders’ agreement would expand GuocoLand’s geographic footprint into Australia and UK, where EWI has developments in.

EWI currently has 75% stakes in three ongoing developments in London and wholly owns a development in West Sydney, Australia, which has a combined development value of S$4.1 billion. As of Oct 16, EWI has about S$1.7 billion worth of sales from these projects.

This investment will help diversify GuocoLand’s geographical holdings as well as provide scale and immediate exposure to ongoing developments, notes Lock.

While the total amount of the company’s potential participation in the IPO is dependent on the price which has yet to be fixed, GuocoLand intends to fund it through internal resources, notes Lock. The company’s gearing stands at 0.9 times with a cash position of S$1.1 billion.

Shares of GuocoLand are up 1 cent at S$1.92. —  theedgemarkets.com.sg