KUALA LUMPUR: Ewein, through its partner Consortium Zenith BUCG, is emerging as a Penang proxy play in prime waterfront property and infrastructure-linked construction activities.

Consortium Zenith BUCG is the concessionaire of the RM6.3bil Penang Road Under-Sea Tunnel project linking the mainland with the prime Penang Gurney Drive area.

“We recommend shareholders to buy this counter based on its promising new business focus and direction,” said Mercury Securities.

Ewein’s City of Dreams (Phase One) is strategically located on the tip of Seri Tanjung Pinang with planned GDV of RM800mil has commenced. Phase Two is expected to be announced soon, comprising planned GDV of RM1bil.

The proposed development is expected to contribute RM200mil in profit before tax and minority interests, over the next four years.

Ewein has received 1203 applications for its 572 units of luxury service apartments, with an estimated average selling price of RM1,172 per sq ft. “This will imply an “oversubscription” situation, whereby demand far exceeds supply,” said Mercury.

Ewein Zenith Sdn Bhd will also develop a wellness resort city known as “Wellness City of Dreams”, in Bandar Tanjong Pinang.

Wellness City of Dreams has a potential GDV of RM13.89bil, and will be part of Penang’s medical tourism hub.

Ewein’s property development segment has started to contribute to the group’s top and bottomline during the group’s 3QY15 ended Sept 30, 2015.

“Going forward, the property development business segment is expected to contribute over 80% of its top and bottomline,” said Mercury.

It has no plans to sell of its manufacturing business, given its strong customer base. Sales orders have been picking up since second half of 2015.

Mercury has a Buy call on Ewein with target price of RM2.03.