Period 2Q13/1H13
Actual vs. Expectations 1H13 net profit of RM44m came in at 39% and 43%
of our FY13 full year forecast and consensus, respectively. The results are
deemed inline as there are pending land sale to be transacted in the 2HFY13.
Dividends As
expected, no dividend declared during the quarter.
Key Result Highlights
1H13 core net profit was down by 24%
despite 22% increase in revenue. The higher revenue was attributed to the
completion of a few projects in Melaka and the progress billings for the new
project in Klang ie: Pulau Indah and Swiss Horizon. The lower net profit was
due to the absence of land sale during the period, 1H13.
Sequentially, the net
profit the net profit reduced by 7% due to additional maintenance cost for its vessels.
Meanwhile, the revenue was up by 15% as the Benalec recognised a big chunk of
the billings from the Sentosacove project i.e. projet completion.
YoY, due to the
absence of land sale in 1H13, the net profit drop by 27% despite higher revenue
recognised during the quarter. However, with the additional land sale coming in
by 2H13, we expect the profit from the land sale to surpass the last year’s
level of RM27m.
Outlook The execution of Johor land development is the
next re-rating for Benalec due to the land’s attractiveness as compared to its
Melaka land. We understand that the Management has identified the off-taker and
it is waiting on the sideline to JV with Benalec. To date, the EIA report is
yet to be finalised. We expect Benalec towrap up with the necessary approval in
2HCY13.
Forecasts No changes in our FY13-14E earnings.
Rating Maintain OUTPEFORM
Maintain OUTPERFORM
given the ample capital upside from the current price (+45%).
Valuation We keep our TP unchanged at RM1.71 based on SoP
valuation.
Risks Slowdown in land sales and prolonged EIA study
results of its Johor land.
Source: Kenanga
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