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Author: kltrader   |   Latest post: Wed, 25 Nov 2020, 11:40 AM

 

Amverton Berhad - 3Q19 Below Expectations, Downgrade From Buy to Hold

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3Q19 below expectations

3Q19 revenue (yoy:-51.8%, qoq:-16.1%) and profit (yoy:-98.4%, qoq:-85.4%) decline more than expected, 9M19 accumulated revenue and profit accounted for 74.3% and 39.1% of our full year estimate respectively.

Property Development await market rebound

Core business property development posted lower revenue (yoy:-76.6%, qoq:- 42.4%) and EBIT (yoy:-99.4%, qoq,-94.3%) due to lesser development activities and lower sales as the Group did not launch any new projects amid soft market environment. Earnings visibility is at risk with low unbilled sales and delayed in property project launches.

Manufacturing and Hotel remain weak

Manufacturing segment posted lower revenue (yoy:-22.9%, qoq-9.7%) and EBIT (yoy:-63.9%, qoq:-45.4%) due to lower sale. Hotel’s 3Q19 result is lower compare to same quarter last year but better compare to previous quarter, revenue little change (yoy:-10.0%, qoq:+35.3%) while earnings swing back to positive from loss in previous quarter.

Downgrade to Hold with same TP

The property sector outlook remains challenging although Government has try to revise the property sector with various measure, there is still no indication that sentiment is turning upbeat anything soon. We downgrade our recommendation from Buy to Hold with same target price of RM1.20 based on P/B of 0.6x on our estimated FY19F NTA

Source: Mercury Research - 25 Nov 2019

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Labels: AMVERTON

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