Logic Invest Research Blog

Author: loginvest   |   Latest post: Mon, 9 Mar 2020, 9:21 AM


Amcorp Properties Bhd 3Q FY 2019 Results Report (HOLD)

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YTD 3Q FY19 total revenue decreased 12.4% vs YTD 3Q FY18; however net profits decreased 86.6% YTD 3Q FY19 vs YTD 3Q FY18. Revenue increased sequentially 3Q FY 19 vs 2Q FY 19, though profits decreased. Finance costs are rising, however contribution from associates is far lower and will be smaller over the next few quarters. London property sentiment continues to soften. We are also less optimistic on property markets in other parts of Europe. Political risk is rising in many countries in Europe, including UK and Spain. For the next few quarters investors can expect only a slight upward bias in the share price. However, at current prices the shares are currently yielding more than 7%, based on our conservative dividend payment estimates.


Risks to our recommendation and target price include: i) softness in UK property demand, ii) an increase in the general level of interest rates, and iii) an increase in the cost of building materials. Amprop has significantly increased its debt level over the past year. However, the recent issue of RCPS has reduced debt levels substantially.


We maintain our HOLD recommendation on Amcorp Properties Bhd (“Amprop”) and reduce our fair value estimate to MYR 0.52. Amprop is a steady dividend payer and will likely maintain prospective yields above 7% over FY 2019-2020. Over the last few years the company more than doubled its total debt to owner’s equity. However Amprop has recently issued another RCPS which has been used in part to reduce bank borrowings. At levels below MYR 0.45 Amprop will be attractive to value investors. However as investment sentiment in the US and Europe seems quite fragile, we deem it prudent to reduce our target price a bit.


Amcorp Properties Berhad, formerly AMDB Berhad is a Malaysia-based company, primarily engaged in investment holding activities. The Company's operations comprise three segments: Property, Engineering and Infrastructure, and Others. Property includes Property development, property investment and property management services. On December 10, 2010, the Company acquired Country Realty Limited. Recently, Amprop and joint venture partner Grosvenor Europe Investments Ltd acquired a 0.082-acre site near Garcia de Paredes Street, which is within walking distance of the Canal de Isabel II Park and Canal Theatre. The historic building will be developed into 15 apartment units and two penthouses and is located in the upscale Chamberi district of Madrid, Spain’s capital.

Source: Wilson & York Securities Research - 27 Feb 2019

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Labels: AMPROP

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Chart Stock Name Last Change Volume 
AMPROP 0.30 +0.005 (1.69%) 135,500 

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