- Glomac reported a net income of RM22mil for 4QFY12, bringing
its FY12 earnings to RM85.8mil. However, stripping out the gain in the disposal
of a Thailand associate, earnings amounted to RM79mil. This came slightly above
(+5%) our estimates, but in-line with consensus numbers.
- In-line with the healthy set of numbers, the group
declared a final dividend of 2.75 sen/share, which takes its full year DPS to
5.5 sen (4.7 sen in FY11). Glomac recorded another strong YoY growth in
earnings (+25%) which was mainly driven by Glomac Damansara, Bandar Saujana
Utama and Glomac Cyberjaya.
- Going forward, the group would be launching RM1.1bil worth
of properties in FY13F, with 46% of them being landed residential properties in
its flagship township developments in the Klang Valley and Johor, while the remaining
are the Plaza Kelana Jaya Phase 4 and (PKJ4) Glomac Damansara integrated
commercial properties.
- We expect sales for the bread and butter projects to continue
to do well amid strong demand for affordable landed homes. Despite some supply
glut in commercial properties within the Kelana Jaya area, we are surprised that
the group has received strong enquiries and is currently talking to potential
investors for an enbloc sale of Plaza KJ4.
- Likewise, the retail portion of Glomac Damansara (NLA:300ksf)
may likely be sold enbloc. We believe this is the best option for Glomac rather
than taking a 50%-stake given its lack of expertise in operating a mall.
However, we note that an enbloc sale usually involves lengthy negotiations and
such a sale may not be done in the near term.
- Glomac is sitting on a healthy balance sheet, with net gearing at 0.1x and the group would
continue to be active in landbanking. We understand Glomac is now keener to be
involved in township development and is looking
at purchasing a sizeable landbank in Selangor for an affordable housing
project and pockets of land in the Klang Valley for fast turnaround
development.
- We are forecasting a growth of 24% in its earnings for FY13F, with the group sitting on healthy
unbilled sales of RM731mil. We are introducing FY15F net income at RM134mil.
- We reaffirm our HOLD rating on Glomac, with our fair value
of RM0.96/share now placed under review.
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