Period FY12
Actual vs. Expectations
FY12 core earnings of RM301m were within
expectations, being only ahead of street and our estimates by 2% and 4%,
respectively.
FY12 sales RM1.7b
(+101%) was slightly above our RM1.6b due to 4 major en bloc sales (Horizon office
blocks); stripping out en bloc sales, offplan sales were up by 46% YoY to
RM1.2b.
Dividends Proposed first and final single-tier DPS of
12.0sen (6.6% yield) met our expectations as we estimated FY12E NDPS of
12.6sen. Expect payout in June-12.
Key Results Highlights
YoY, FY12 core earnings grew 55% to RM301m due
to en bloc sales. Pretax margins were compressed by 5ppt to 40% because of
sizeable basement works of Kencana Square (more construction recognition than
development earnings at this stage as it is only an associate project) and
Vertical@Bangsar South.
QoQ, 4Q12 pretax
profit dipped 19% to RM97m as last quarter saw 2 en bloc sales worth RM204m vs.
this quarter’s 1 en bloc sale of RM173m.
Outlook Expect 1Q13 to register 1 en bloc sale as they
have sold an office block from its inventories (Tower 3, Avenue 7, Horizon P2 @
Bangsar South) to Pelaburan Hartanah Bhd for RM183m (ASP RM740psf) which we
consider as fair pricing.
Targeting FY13E new
project launches of RM1.8b (Desa Green, Scenaria@North Kiara, SouthView Residence
near Bangar South, Desa III).
Change to Forecasts Minor adjustments (-3%) to FY13E net profit
post house-keeping while we maintain FY13E sales assumptions of RM1.8b (+6%
YoY), including 1Q13 en bloc sale. Any other en bloc sales will add upsides to
our target. Unbilled sales of RM713m provide close to 1 year visibility.
Rating Maintain OUTPERFORM
Investors’ need for
defensive havens will keep this stock on the radar given FY12-13E net yields of
6.6%-7.0% which is higher than sizeable MREIT's dividend yields of 4.5%-5.0%.
Valuation Maintain TP of RM2.30 based on 34% discount to
our FD SoP RNAV of RM3.43.
Risks Sector risks, including negative policies and disappointing
dividends.
Source: Kenanga
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