KUALA LUMPUR: Eco World Development Group Bhd’s (Eco World) recent proposal to acquire two parcels of land in Batu Kawan, Penang, for RM875mil cash is a positive one with a fair acquisition price.

Maybank Investment Bank Research, which has a buy call on the stock, said on Wednesday it estimates the acquisitions would enhance the revalued net asset valuation (RNAV) per share by eight sen.

It views Eco World’s new “Business Model” to fund the developments of its projects for the mixed developments as a positive one and was maintaining its earnings forecast for the year and a target price of RM1.46.

To recap, it had entered into two sale and purchase agreements to buy a total 374.6 acres of leasehold land in Batu Kawan for RM875mil cash (RM53.64 per sq ft).

The land would be developed into mixed developments called Eco Horizon and Eco Sun with RM7.76bil in gross development value.

To ease the burden on its balance sheet, the group had proposed to raise equity funding at the project level to fund the developments of its projects via a new ‘Business Model’.

Eco World had invited the Employees Provident Fund (EPF) to participate in the joint developments of its land in Mukim Ijok (Eco Gardens, Eco Business Park V), Setia Alam (Eco Ardence) and the upcoming Batu Kawan (Eco Horizon, Eco Sun).

The EPF had issued a letter of expression of interest on a non-binding basis to participate in the joint-development of these land subject to conditions to be finalised and further details to be made available later.

Maybank Research said Eco World’s second quarter financial year 2016 (Q2 FY16 ) net profit was slightly ahead of its forecasts, adding that its seven month actual sales remain on track to meet the research house FY16 sales target.

The group had locked in RM1.32bil in property sales in the seven months, meeting 44% of its RM3bil sales target (excluding overseas projects). Unbilled sales were healthy at RM4.5bil as at end-May.