Matrix Concepts Holdings (MCH) started its financial year with a 1QFY24 net profit of RM64.6m (+37.3% YoY, +14.2% QoQ), which came in largely within our estimate and consensus estimates at c.26% and 27% of full year estimates respectively. The Group secured RM305.3m pre-sales in 1QFY24 (with average take-up rate of 88.9%), while unbilled sales stood steady at RM1.4bn. It has, in the pipeline, projects worth RM1.9bn (as compared to RM1.28bn launched in FY23) to be launched in FY24, with a sales target of RM1.36bn (vis-à-vis RM1.2bn in FY23). So far, it has launched projects worth about RM200m, while eyeing further launches worth some RM500m in 2QFY24. All told, we maintain our Outperform call, and a book-value based target price (TP) of RM1.80.

• 1QFY24 revenue rose 44.6% YoY to RM331.4m, mainly driven by higher contribution from the Group’s property development division, which benefited from improved speed of construction activity, as labour shortage issues plaguing the industry has largely been resolved. Again, the main revenue driver is from its flagship Sendayan Developments, at RM300m while the Group’s Bandar Seri Impian township in Kluang recorded RM8m in revenue and the remaining RM13m combined is from The Chambers and M. Greenvale. Group gross profit margin declined marginally to 45.9% (from 47.7% a quarter ago) mainly due to product mix.

• FY24 sales target of RM1.36bn, or about +13% YoY from its FY23 pre-sales, underpinned by pipeline launches worth RM1.9bn. MCH is launching projects worth RM1.2bn from its flagship township, Sendayan Developments and is also looking to unveil its serviced apartments project in Cheras (Levia Residences) that has estimated gross development value (GDV) of RM532m in 3QFY24. Meanwhile, the Group’s Indonesian development, Menara Syariah in Pantai Indah Kapuk 2, Jakarta, Indonesia, is now targeted for completion in 3QFY24, with construction progress now at 94.8%. Elsewhere, MCH also has 2,223 acres of landbank with estimated GDV in excess of RM15bn.

Source: PublicInvest Research - 23 Aug 2023