KUALA LUMPUR: Eco World Development Group Bhd's outlook remains positive as the company capitalises on the presence of Microsoft, said Kenanga Research.
Eco World hopes to take its industrial products to a higher level by rebranding some of them Quantum, starting with products in Eco Business Park VI in Kulai, Iskandar Malaysia, backed by anchor buyer Microsoft.
Kenanga Research believes Eco World will likely replicate its well-received offerings of detached, semi-detached, and cluster factories with versatile four-in-one designs that could serve as showrooms, offices, warehouses and production facilities.
"We are mildly positive on Eco World's latest initiative, which we believe could potentially accelerate the development of Eco Business Park VI in Kulai, Iskandar Malaysia, as well as generate higher sales and hence margins.
"While we believe Microsoft's data centre does not come with a high-value supply chain (and hence, we do not see its suppliers scrambling to set up shops around the data centre), the presence of Microsoft alone will add prestige to Eco Business Park VI," it said.
Kenanga Research maintained its earning forcaste on Eco World as it does not expect meaningful earnings impact from the company's latest initiative during its forecast period.
"We maintain our target price of RM1.41, having brought forward profit recognition for some of its projects, with 'Underperform' call," it added.