Eco World recently unveiled its Eco Sanctuary in Selangor to the media

KUALA LUMPUR:  In spite of a challenging property market, EcoWorld Development Bhd’s new launches have seen solid take-up rates and will likely help it achieve its RM3 bil sales target for its latest full financial year, says Maybank Investment Bank Research.

The research house had on Tuesday maintained its "buy" rating for EcoWorld with a target price of RM1.69. The stock was last traded at RM1.42 in early Teusday trade.

The softening demand for primary market transactions, coupled with stiff competition by peers in the residential housing segment, has not deterred EcoWorld from reporting impressive sales, says Maybank Research.

Its flagship Eco Sanctuary project in Canal City, Selangor saw a take-up rate of 70% for its Phase 1 development, which comprise of about 700 units of landed properties available for sale.

“This is impressive considering the fierce competition from other nearby residential projects which are priced at between 11-40% below Eco Sanctuary’s terraces. EcoWorld’s innovative concept for this project allowed for the units to be priced higher,” says Maybank.

While other developers have revised downwards their sales projections for this year, EcoWorld remains confident of achieving their initial sales target of RM3 billion.

As at end-Aug, the group has locked in RM2.37 bil in sales from new launches. Nearly two thirds of new sales were derived from the Central region, while 40% comes from the Southern region.

On the other hand, Maybank notes that EcoWorld’s profit outlook and net margins look unexciting over the next 1-2 years.

“This is because of the heavy infrastructure expenditure requirements for the group’s new projects, while net gearing is set to stay above 0.5 times due to the lack of significant earnings constribution and its aggressive landbanking activities,” it says.

The group’s final quarter results for its financial year ending Oct 31, 2015 is set to be released in December.