Period 1Q12
Actual vs. Expectations
1Q12 net
profit of RM54m is considered broadly in line with expectations, although it
only makes up 15% of the street’s FY12E earnings of RM356m and 14% of our
RM393m. 1Q12 is a much shorter working quarter due to the festive season. Also,
previous 1Qs only made up <10% of full year earnings. 2H12 is likely to be
stronger given the current timing of launches and land sales.
Dividends No
dividends as expected.
Key Results Highlights
YoY, 1Q12
bottom line grew 208% given strong billings from Nusa Idaman, Dutamas, 28 MK, Quintet,
etc. Pretax margin improved by 9.6ppt to 23.6% given a higher project margin
mix and lower finance cost (-24% YoY).
QoQ, 1Q12
earnings slid 61%, which is typical given the reasons mentioned above; 4Qs are
also the strongest as they tend to register major land sales.
1Q12 sales
of RM290m comprised of 57% Nusajaya projects with Klang Valley making up the
remaining 43%. 1Q12 sales only made up 10% of UEMLAND and our FY12E target of
RM3.0b because of timing of new launches and land sales. For example, YTD Apr-12 sales came up
to c.RM430m due to launch of Summer VOS in the month itself.
Outlook Although
1Q12 sales appear weak, management is confident of meeting its FY12E KPI target (sales: RM3.0b; ROE: 10%)
(Refer overleaf for details). We can also look forward to potential en bloc
sales, new launches and Nusajaya land sales by 2H12.
Change to Forecasts
No changes
to FY12-13E earnings of RM393mRM501m. Unbilled sales of RM1.85b provide c.1
year of visibility.
Rating
MAINTAIN OUTPERFORM
Beneficiary
of the burgeoning demand of properties in Iskandar Malaysia, with 2011 tipping
points as catalysts with spill-over impact from Singapore.
Valuation Maintain
a TP of RM2.65 based on 19% discount* to our FD SOP RNAV of RM3.26
Risks Unable
to meet sales target. The up-cycle of Singapore’s property sector. Sector
risks, including negative policies.
Source: Kenanga
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