Latest news with #EcoWorldMalaysia
The Star
12-06-2025
- Business
- The Star
Developers' operational costs expected to rise
Maybank IB said the SST on construction services from July 1, 2025 will add pressure to property developers' margins for ongoing (sold) projects. PETALING JAYA: Property developers' operational costs could rise following the government's move to impose a 6% sales and service tax (SST) on construction services. Effective July 1, 2025, construction services for infrastructure, commercial and industrial buildings will be subject to a 6% service tax if the taxable value exceeds RM1.5mil annually. However, exemptions are provided for residential buildings, public utilities related to housing, and non-reviewable contracts, which will enjoy a 12-month grace period from the effective date. Additionally, business-to-business (B2B) relief will be available to prevent double taxation. According to Maybank Investment Bank Research, the SST on construction services from July 1, 2025 will add pressure to property developers' margins for ongoing (sold) projects, as they might have to absorb the additional cost for commercial and industrial builds. It pointed out that there is currently no guideline on how it applies to contracts entered into before July 1 but billed thereafter, or whether it is only applicable to new contracts signed after the SST implementation date. 'As most contracts incorporate a regulatory change review clause, developers are expected to bear this SST, rather than contractors,' the research house said. It believes that developers are likely to pass on these additional costs to buyers (those unsold stock and future projects) to avoid margin erosion stemming from rising construction costs. However, a slower economic growth trajectory and weak market demand could constrain pricing power. 'Developers engaged in data centre (DC) construction, including Eco World Development Group Bhd (EcoWorld Malaysia) and Sime Darby Property Bhd (SimeProp), could also see increased expenditure, potentially reducing their internal rate of return,' it said. Maybank IB estimates a four-sen reduction in EcoWorld Malaysia and SimeProp's revised net asset value or RNAV estimates due to the 6% additional costs associated with their DC constructions. The research house added that with a strategic emphasis on generating recurring income from investment properties in recent years, such as malls, the 8% SST on rental income would be borne by tenants, which could restrain developers' leverage for rental increment negotiations. 'We maintain our earnings forecasts, pending clarity. Maintain 'neutral' on the property sector. 'Our buys are Eco World International Bhd , S P Setia Bhd and EcoWorld Malaysia,' it said. The research house highlighted risks to its calls including weaker-than-expected property sales dragged by weaker economic outlook, policy risks, stricter lending measures by the banks, higher-than-expected liquidated ascertained damages compensation following the latest ruling by the Federal Court, and rising building material costs and labour issues.
The Star
20-05-2025
- Business
- The Star
China's Haitian Group breaks ground on RM3bil manufacturing hub at Eco Business Park II
Haitian Group chairman Zhang Jian Ming (fifth from left) and Eco World Development Group Bhd president and chief executive officer Datuk Chang Khim Wah (fourth from left) at a groundbreaking ceremony that saw China-based Haitian Group breaking ground on Phase 1 of their regional manufacturing facilities situated at Eco Business Park II, Iskandar Malaysia. With them are (from left) Haitian Group Research Institute Dean Fu Nan Hong, Malaysia main distributor Chin Fook Lai, Haitian overseas integrated supply chain director Shi Nan Da, Haitian Machinery overseas department general manager Xiang Lin Fa, Haitian Group finance division director Chen Yun and Haitian Machinery Malaysia general manager Zhong Sai Er. PETALING JAYA: The Haitian Group, a leading industrial equipment manufacturer from China, has broken ground on Phase 1 of their regional manufacturing facilities situated at Eco Business Park II (EBP II), Iskandar Malaysia. In a statement, Eco World Development Group Bhd (EcoWorld Malaysia) said the 92-acre industrial site at EBP II was acquired by Haitian Machinery (Malaysia) Sdn Bhd in 2022 from Eco Business Park 2 Sdn Bhd, a wholly owned subsidiary of EcoWorld Malaysia. 'This is the Haitian Group's first project in Malaysia and apart from manufacturing facilities, the site will also house a research institute, employee dormitories and other amenities. 'The estimated total investment cost that the Haitian Group will be expanding on its planned facilities at the 92-acre site is approximately RM3bil.' Construction of Phase 1 is expected to be completed by the end of 2026 with production planned to start in 2027. Over the next five years, EcoWorld Malaysia said approximately 400 employees are expected to be employed at the facility, which will be producing sophisticated injection moulding machines and computer numerical control machines for the South-East Asian region. EcoWorld Malaysia president and chief executive officer Datuk Chang Khim Wah said: 'This is a momentous occasion and the culmination of extensive and meticulous design and masterplanning by the Haitian Group to create a truly world-class manufacturing hub at EBP II. 'We are indeed privileged to have worked with them over the years to help realise their vision to expand their business in South-East Asia. Their decision to carry out not just high-tech manufacturing but also cutting-edge research at their facilities in EBP II will certainly contribute towards technology transfer, resulting in higher value jobs and increased business opportunities for Malaysians.'
New Straits Times
02-05-2025
- Business
- New Straits Times
Eco World International jumps 21pct after move to scrap tie-up with EcoWorld Malaysia
KUALA LUMPUR: Shares of Eco World International Bhd surged as much as 20.9 per cent in early trade today after the company announced it was ending a long-standing collaboration with Eco World Development Group Bhd (EcoWorld Malaysia). At 10.30am, the stock jumped 4.5 sen to 26 sen with nearly 10 million shares traded. This brought its market capitalisation to RM516 million. While the counter is down 3.7 per cent year-to-date, it has rallied 30 per cent over the past week. EcoWorld Malaysia also edged up, gaining one sen or 0.53 per cent to RM1.89. On Wednesday, Eco World International proposed to terminate a 2016 agreement with EcoWorld Malaysia that restricted both companies from operating in each other's markets. Under the agreement, Eco World International was barred from undertaking property development in Malaysia, while EcoWorld Malaysia was limited to domestic projects unless carried out through the former. The decision follows mounting challenges in Eco World International's key overseas markets, namely the United Kingdom and Australia. The move would also see Eco World International change its name to EWI Capital Bhd.
The Star
30-04-2025
- Business
- The Star
EcoWorld International unveils new strategy; to rebrand as EWI Capital
PETALING JAYA: Eco World Development Group Bhd (EcoWorld Malaysia) will no longer be confined to building properties only within Malaysia, after its 29%-owned Eco World International Bhd (EWI) announced a new business direction that involves its entry into Malaysia and a name change. With the loss-making EWI diversifying into Malaysia, EcoWorld Malaysia said it can also 'directly explore and pursue compelling investments' in real estate or development projects abroad. This may include Singapore, where it already has a marketing presence. However, the statement issued today stopped short of openly mentioning the Australian and UK property markets, where EWI is involved in currently. At the moment, a collaboration agreement signed in 2016 by both companies restricts EWI from venturing into Malaysia, while EcoWorld Malaysia is restricted from undertaking any property development or investments in countries other than Malaysia. EWI announced yesterday a series of proposals aimed at expanding the group's geographical scope of operations to broaden its revenue base and accelerate income generation. These include the proposed termination of the collaboration agreement. Following the termination, EWI will no longer carry the EcoWorld brand name and will thereafter be known as EWI Capital Bhd. As such, it is also proposed that the brand licence agreement signed in 2014 be terminated. For it to venture into Malaysia, EWI needs cash for reinvestment, and therefore, the company looks to sell some of its 'existing long gestational property assets' over the next 18-24 months. As for EcoWorld Malaysia, while the 29% equity interest in EWI will be retained, the stake will be de-recognised as an associate company and instead, recognised as a simple investment. Pursuant to the proposals, Tan Sri Liew Kee Sin and Datuk Heah Kok Boon have voluntarily resigned as the directors of EWI on April 30. Liew is the executive chairman and Heah is an alternate director of EcoWorld Malaysia. Following their resignations, EcoWorld Malaysia will no longer be privy to EWI's business strategies or be able to exercise any significant influence over its financial and operating policy decisions. The proposals will not take effect immediately and must be approved by shareholders of both EWI and EcoWorld Malaysia at an extraordinary general meeting to be convened later. EcoWorld Malaysia said it stands to benefit from EWI's efforts to protect and potentially enhance the company's long-term value proposition. In addition, with the termination of the collaboration agreement, this will open up fresh opportunities for EWI and EcoWorld Malaysia to work together in a different capacity or at the project level for their mutual benefit. In a statement, EcoWorld Malaysia president and chief executive officer (CEO) Datuk Chang Khim Wah said there are many ways for EcoWorld Malaysia and EWI to forge new areas of collaboration. 'We can be a development manager to help them develop their Malaysian projects or we can even explore joint ventures together at project level. 'The combination of our experience and expertise as well as pooling of resources and balance sheet strength with EWI should release good synergies to contribute towards greater value creation for both companies. 'In EcoWorld Malaysia's case, such an arrangement will help us grow our fee-based income stream and expand our portfolio of projects, whether as a development manager or joint venture partner,' said Chang. Meanwhile, EWI president and CEO Datuk Teow Leong Seng reaffirmed that the company will maintain its presence in the UK and Australia. This will allow the company the flexibility to launch its remaining sites when market conditions improve. According to Teow, several broad macroeconomic indicators in the UK and Australia have begun to trend in a more favourable direction. Nevertheless, both mortgage rates and construction costs are still elevated compared to pre-pandemic levels. Teow highlighted that the decision to spread EWI's wings to Malaysia was also driven by the accounting rules governing revenue recognition from development activities. In both the UK and Australia, revenue is recognised only upon the completion of projects and the handover of units to purchasers. This creates a long timing gap between new launches and revenue recognition which will weigh on the group's financial performance over the next several years. Conversely, in Malaysia, the accounting rules permit development revenue to be recognised progressively, with only a short timing gap between new launches and income recognition. This can potentially generate nearer-term income for EWI once a project is secured and launched which will strengthen the group's financial performance. 'Depending on the nature and type of projects that we undertake in Malaysia, one possibility (for collaboration) could be in the area of development management services to be provided by EcoWorld Malaysia, given that we do not presently have our own property development team here. 'Combined with our zero gearing position and the gradual cash build-up from the sale of our remaining completed stocks, we are well-positioned to explore new investment and development opportunities,' said Teow.
New Straits Times
30-04-2025
- Business
- New Straits Times
EcoWorld entities part ways, key directors resign
KUALA LUMPUR: Eco World International Bhd has proposed to terminate the collaboration agreement it signed with Eco World Development Group Bhd (EcoWorld Malaysia) to explore property investment and development opportunities in Malaysia. The agreement was signed between both parties in 2016 which imposed geographical restriction on property development or investments for both companies. Under the agreement, EcoWorld International agreed to not undertake any property development or investments in Malaysia while EcoWorld Malaysia will not undertake any projects outside the country, except through EcoWorld International. EcoWorld International said it has been exploring other avenues to pursue growth and address the market challenges faced in the United Kingdom (UK) and Australia, where it operates. It noted that residential property market conditions in the UK and Australia have been challenging for new project launches since the onset of the Covid-19 pandemic. "Whilst staying focused on cash-generation, EcoWorld International's board and management have been actively exploring other avenues to pursue growth, create long-term value for its shareholders and address market challenges. This includes exploring opportunities in jurisdictions outside the UK and Australia. "In this regard, Malaysia is attractive given its stable economic outlook, promising prospects, more favourable accounting rules for revenue recognition from development activities as well as EcoWorld International management team's familiarity with the local real estate market," it said in a statement. Following the termination of the collaboration, the company said the objective of the parties to adopt a common "EcoWorld" brand name as envisaged in the brand license agreement entered in 2014 will no longer subsist. Accordingly, the brand license agreement will be terminated simultaneously with the termination of the collaboration agreement. To avoid market confusion with EcoWorld Malaysia, EcoWorld International's name is proposed to be changed to EWI Capital Bhd once it enters the Malaysian market. "The above proposals will be presented to EcoWorld International's shareholders for their approval at an extraordinary general meeting (EGM) to be convened. EcoWorld Malaysia will also be tabling the relevant proposals to its shareholders for approval at its own EGM," it said in a statement. Meanwhile, to address potential conflict of interest, Tan Sri Liew Kee Sin and Datuk Heah Kok Boon have voluntarily resigned as directors of Eco World International effective today. Liew is the executive chairman and Heah is an alternate director of EcoWorld Malaysia. Accordingly, EcoWorld Malaysia will de-recognise its 29 per cent stake in Eco World as an associate company and instead, recognise it as a simple investment. EcoWorld International president and chief executive officer said the company could explore development management services in Malaysia through EcoWorld Malaysia, as it does not have its own property development team in the country. The company plans to monetise some of its long-gestation property assets over the next 18 to 24 months to raise proceeds for reinvestment. "Combined with our zero gearing position and the gradual cash build-up from the sale of our remaining completed stocks, we are well-positioned to explore new investment or development opportunities. "We believe that by expanding the geographical scope of our operations to include Malaysia, we will be able to chart a more agile and resilient path forward for the group," he said.
