EcoWorld set for RM167mil profit boost from data centre land sale: CGS International

KUALA LUMPUR: Eco World Development Group Bhd's (EcoWorld) RM1.013 billion land sale to Tera Data Centers (Malaysia) Sdn Bhd is expected to provide a positive boost to its sales and earnings, said CGS International Research.

Eco World's joint venture, Eco Business Park 7 Sdn Bhd, has entered into a conditional sale and purchase agreement to sell two parcels of industrial land in Negeri Sembilan to Tera Data Centers.

CGS International is positive on the land sale, as it signals a potential rise of data centre interest in Malaysia that could underpin a multi-year sales and earnings growth story.

"This will ultimately benefit leading industrial park developers such as Eco World," it said in a note.

Assuming a PBT margin of 20 to 30 per cent, CGS International estimated an incremental pre-tax profit of RM110 million to RM167 million from the land sale, equivalent to 13 to 19 per cent of its financial year 2027 (FY27) pre-tax profit forecast.

"The earnings contribution, based on a 55 per cent stake, is expected to be progressively recognised through FY27 and FY28," it said.

Meanwhile, CGS International believes the RM105 per square foot (psf) land price appeared reasonable given MVV 2.0's earlier development stage, although it remained below recent DC land transactions in more established Klang Valley locations.

"Recent comparable data centre land sales are IOI Properties' sale of its Banting land at RM125 psf and Mah Sing's sale of its Southville City land at RM180 psf, as both locations are located only 20-40 km away from EBP 7," it said.

Since its launch in November 2025, EBP 7 has achieved strong momentum, with more than RM800 million in industrial lots and ready-built factories sold under the small and medium enterprise (SME) Core Phase 1.

"Combined with this data centre land deal, we estimate total sales from EBP 7 have now exceeded RM1.8 billion, underscoring its position as a sought-after industrial destination attracting both SMEs and global hyperscale players.

"We keep our forecasts unchanged, pending further clarity on the land sale. Reiterate Add with an unchanged target price of RM2.63," it added.