- We reaffirm our HOLD
rating on Bandar Raya Developments (BRDB) with our fair value unchanged at RM2.40/share,
assigning a discount of 35% to our fullydiluted NAV estimate of RM3.70/share.
- Key take-away points
from our visit:
(1) As we have expected
Bandar Raya Developments (BRDB) has been rather quiet as far as new sales are concerned.
We note that YTD sales are currently just close to RM100mil.
The reason being, there
were no new launches in the 1QFY12 but sales were underpinned by: (i)
Liquidation of remaining units at Troika with about 30 units left (ii) Sales at
Verdana North Kiara and 6Capsquare with both take-up just slightly above 70%
and (iii) Sales of bigger units at One Menerung.
(2) BRDB is going ahead
with the launch of Medang Serai (GDV: RM RM876mil) in Bangsar in 2HFY12 with
121 units on offer. The starting price for these units will be about RM4mil-RM5mil
(or RM1,000psf-RM1,200psf) and we are quite positive there will be strong
response given that this
could be one of the last
high-rise developments within Bangsar, if not the last. We are estimating about
60% takeup within the first year.
We do not think the size
and the price would deter buyers given the exclusive location and lack of new
supply of condos within the area. Other launches for the year include: (i) 93
units at BluWater, Mines comprising semiDs, superlink and bungalows; (ii)
Permas Jaya – about 100 units of SemiDs and 62 units of shophouses.
(3) We believe the
disposal of its investment properties (i.e. BSC, CapSquare Mall, Menara BRDB
and Permas Jusco) should not be packaged, because we are sceptical there would
be strong interests on the assets apart from BSC. We are not surprised if there
would be continued delay in the tender of these assets.
- BRDB has been trading
at a steep discount (30%-40%) to its NAV for awhile now and this is not
surprising as we think the group has not been timing the market right with delay
in launches.
Source: AmeSecurities
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