CGS Reiterates 'Add' Call On EcoWorld After Fifth DC Land Sale

KUALA LUMPUR, April 27 (Bernama) -- CGS International reiterated its ‘add’ call on Eco World Development Group Bhd (EWDG) after the group sold 20.07 hectares of industrial land at its Quantum Edge Industrial Park in Kulai, Johor to KNBDC Malaysia Five Sdn Bhd for RM280.8 million.

The transaction marked its fifth data centre (DC) land sale within two years.

According to CGS, the sale accelerates EWDG’s earnings growth forecast for financial years (FY) 2026-2028.

“This supported our earlier findings that key developers are seeing a pick-up in enquiries from regional DC players, which are increasingly viewing Malaysia as a strategic alternative location amid shifting supply chain dynamics and geopolitical uncertainties,” it said in a research note today.

The research firm added that this land sale is expected to command a profit-after-tax margin of 37-52 per cent, assuming additional infrastructure costs of RM50-RM70 per square foot (psf) to make the land DC-ready, and land cost psf of RM12.

“This implies potential incremental net profit of RM104 million-RM147 million from the sale, which could boost its FY2027 core net profit forecast by 18-26 per cent.

CGS said that it continued to view EWDG as a key proxy for Malaysia’s emerging DC theme, supported by its strategic industrial landbanks, strong execution track record, and ability to structure transactions flexibly either via outright land sales or potential joint venture-led digital infrastructure developments.

At 12.02 pm, the company’s shares gained 10 sen to RM2.06, with 2.69 million shares traded.

-- BERNAMA