Details of IPO<\/h3>\n
Here is a quick summary if you have missed the IPO last month, . The company had issued a total of 2.15 billion new shares, with 48 million shares for the Malaysian public through balloting. It expected to raise RM2.58 billion from the issuance with a IPO share price of RM1.20.<\/p>\n
The breakdown for the use of proceeds is as follow:<\/p>\n
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- 37 billion (52.9%) to repay bank borrowings and repayment of advances<\/li>\n
- 13 billion (43.6%) for working capital and\/or future land acquisitions<\/li>\n
- Remaining (3.5%) to defray listing expenses and other related purposes<\/li>\n<\/ul>\n
As an incentive, EWI will issue to all of its shareholders 2 free warrants for every 5 shares held after the IPO. The bonus issue of warrants was completed prior to the listing.<\/p>\n
The company does not have a fixed dividend policy\u00a0& is dependent on its profitability and financial condition.<\/p>\n
Financial Position<\/h3>\n
![\"\"](\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2018\/04\/eco-world-financial-summary.jpg\")
<\/a><\/p>\nFrom its annual report 2016, we see that the revenue growth has been phenomenal, growing from RM65 mil in FY2012 to almost RM2.5 billion in FY 2016! Simiarly, net profits also joined in the bandwagon, surging from RM 7.2 mil to RM 129.3 mil in the same period!<\/p>\n
Despite the explosive growth in both the top and bottom-line, one should note that the numbers are primarily fueled by debt. Total borrowings have\u00a0scaled up from RM64 mil to RM2.86\u00a0billion, even more than the sales figure itself!<\/p>\n
That said, it is common knowledge that huge amount of debts will be taken up by a property developer \u00a0in advance to finance its construction phases. You can only see the revenue after the properties are completed (sell to people and collect money).<\/p>\n
Given its backing under Eco World Development and a strong track record in\u00a0its financial performance, the company has more room to grow in future. And that brings us to the next point.<\/p>\n
Eco World’s Growth Prospects<\/h3>\n
According to its corporate presentation, EWI will recognize a huge chunk of profits come FY2018 once\u00a0handover commences in phases starting with LCI and Embassy Gardens.<\/p>\n
![\"eco](\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2017\/04\/2-2-1024x527.jpg\")
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