KUALA LUMPUR: Maybank Investment Bank (Maybank IB) has reiterated its "Buy" call for Eco World Development Bhd with a target price of RM1.96.
This comes after Eco World scored 69 out of 100 in environmental, social and governance (ESG) metrics, ranking above its industry peers.
Maybank IB highlighted Eco World's strong commitment to environmental transparency, particularly in greenhouse gas emissions reporting, and its goal of achieving net zero emissions by 2050.
"We maintain our target price of RM1.96 based on our earnings forecasts and reaffirm our buy rating," said Maybank IB in a report today.
The assessment is grounded in Eco World's FY23 Sustainability and Corporate Governance Reports.
Eco World's ESG score of 69 places it above the sector average, closely comparable to Sime Darby Property Bhd's score of 63.
Maybank IB pointed out that Eco World could have scored higher if not for an increase in energy and waste intensity trends and a slight decrease in independent directors on its board following retirements in FY23.
"Eco World excels in disclosing greenhouse gas emissions compared to its peers," Maybank IB added. "In FY23, the company set clear targets for reducing emissions."
Eco World introduced a roadmap to achieve net zero emissions by 2050 and aims to cut Scope 2 emissions by 20 per cent by 2025 and 30 per cent by 2030, starting from a FY19 baseline of 6,976 tons of CO2 equivalent.
Maybank IB expressed confidence in Eco World's management, citing its proactive approach, strong sales performance, and robust financial health, evidenced by a net gearing ratio of 0.24x as of 2QFY24.
The recent RM402 million land sale to Microsoft for Eco Business Park VI underscores the management's capabilities.
With a solid balance sheet, Eco World plans to distribute at least 6 sen per share in dividends for FY24, yielding 4.0 per cent, while actively pursuing new landbank opportunities.