Period 1Q12
Actual vs. Expectations
1Q12 net profit of RM60m was within expectations, making up
28% of street’s FY12E net profit of RM216m and 29% of our RM207m.
Dividends No dividend as expected.
Key Results Highlights
YoY, 1Q12 earnings grew 46% on the back of strong sales and
billings from its on-going projects (e.g. Kinrara Residence, Garden Residence,
M-City, M-Suites, etc) and stable group pretax margins of 18.4%.
QoQ, 1Q12 bottomline also increased by 46%. However, this
was more towards greater recognition of higher margin products like M-City and
Kinrara Residence, which boosted group pretax margins by 4.8ppt to 18.4%.
1Q12 sales of RM676m (+23% YoY) are on schedule to meeting
the group and our FY12E sales targets of RM2.5b and RM2.4b, respectively. In
fact, Ytd-15 May 2012 sales of RM1.0b also implies that the group is on
schedule to meeting its sales (refer overleaf for details).
Outlook MAHSING’s FY12E sales target of RM2.5b (ours:
RM2.4b) will be mainly driven by Icon
City@PJ, Kinrara Residence, M City @ Jln Ampang, M Residence @ Rawang,
Garden Residence, Icon City, etc. Recent acquisition of Bangi land (a.k.a. Southville
City) project earnings is expected to be more significant from FY14 onwards.
Change to Forecasts
No changes to our FY12-13E net profit of RM207m-RM268m.
Unbilled sales of RM2.5b provides 1.3 years visibility.
Rating MAINTAIN MARKET PERFORM
Our call is a sector driven call due to the unexciting
sector dynamics couple with its higher than average net gearing level among
developers under our coverage.
Valuation Maintain TP of RM2.00 based on 42%* discount
to our FD SoP RNAV of RM3.42.
Risks Unable to meet sales targets; this will be
more impactful on developers with higher net gearing. Sector risks, including
negative policies.
Source: Kenanga
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