It is little wonder that EcoWorld is the best performing stock among The Edge Billion Ringgit Club members in the property sector for the third straight year. Coming from a very low base, its share price was up an average 106.3% a year between end-March 2013 and end-March 2016.

At least 11 sizeable projects have been announced in the past two years. Thanks to a sizeable jump in property sales, its pre-tax profit grew at an enviable three-year compound annual growth rate of 109.02% from

RM8.09 million in the financial year ended October 2012 (FY2012) to RM73.92 million in FY2015. Return on equity (ROE) is at low single digits, though it did improve year on year in FY2015.

To finance its expansion, EcoWorld raised RM2.8 billion in May last year, following a 20% placement to institutional investors. The order book was subscribed by 1.41 times, despite tough market conditions, a testament to its repute and investors’ expectations of EcoWorld replicating the growth seen at S P Setia.

“Going forward into FY2016, the group’s prospects are expected to improve markedly. This positive outlook is supported by the strong cumulative sales of RM6.2 billion secured in FY2014 and FY2015, which has enabled EcoWorld to carry forward a high level of unbilled progress billings amounting to RM4.16 billion as at Oct 31, 2015,” Liew said in the company’s 2015 annual report.

Sales recorded in FY2015 came from four projects in the Klang Valley (RM1.58 billion), six in Iskandar Malaysia (RM1.21 billion) and two in Penang (RM224 million). Its land bank grew from 4,925.7 acres in FY2014 to 7,443.9 acres in FY2015 while gross development value increased to RM81 billion from RM47 billion in FY2014.

Its 1HFY2016 net profit came in at RM58.9 million, accounting for 50.3% of the consensus estimate of RM117 million. Growth was driven by billings in projects such as Eco Majestic in Semenyih, Eco Botanic, Eco Sky, Eco Sanctuary and its Eco business park developments. As at May this year, unbilled sales stood at RM4.5 billion, which UOB Kay Hian Research says should sustain earnings for the next two years.

Analysts remain largely bullish on EcoWorld, with nine “buys” versus only one “hold”, according to Bloomberg data. Target prices range from UOB Kay Hian’s RM1.20 to UBS’ RM1.80, averaging at RM1.58. This implies a 15.3% upside potential from its RM1.37 close on Aug 16.

EcoWorld’s plan to de-gear by selling a stake in three projects to a joint-venture partner has been well-received by analysts. The Employees Provident Fund has been invited to participate in its developments in Mukim Ijok (Eco Gardens and Eco Business Park V), Setia Alam (Eco Ardence) and Batu Kawan (Eco Horizon and Eco Sun), Maybank Investment Bank Research says in a June 29 note.

Investors are also keeping watch on the Eco World International (EWI) initial public offering, which is expected to proceed this year despite concerns about Brexit. EcoWorld plans to take a 27% stake in EWI, which owns mainly UK and Australian assets.

Though the challenging operating environment could limit its upside, analysts see potential for the stock to move higher should EcoWorld achieve stronger-than-expected sales, significantly improve margins and make value-accretive development deals.