Investment Highlights

• We are maintaining our HOLD recommendation on Titijaya Land (Titijaya) with a higher fair value of RM0.32 (from RM0.28) based on a 50% discount to its RNAV (Exhibit 1). Our upgrade in valuation is to reflect the timing of future projects’ recognition following guidance by management. We made no changes to our FY20–FY22 net earnings forecasts.

• We recently met up with Titijaya for updates on the company’s plan for 2020 and beyond. Titijaya is maintaining its new sales of RM400mil for FY6/20. At present, the company has several ongoing projects, namely 3rdNvenue Phase 1 @ Embassy Row, KL (Service suite – GDV of RM577mil); The Shore @ KK, Sabah (mixed development – GDV of RM534mil); Riveria @ KL Sentral (integrated development – GDV of RM373mil); and Park Residency @ Cheras (landed residential – GDV of RM80mil).

• Titijaya launched Seiring Residensi in August 2019, which is phase one of its Damaisuria township project. Consisting of four towers, Seiring Residensi offers units at sizes ranging from 668 sq ft to 972 sq ft, with up to four bedrooms. Developed over four phases, Damaisuria will have a total GDV of RM1.59bil, while the first phase Seiring Residensi will have a GDV of RM677mil.

• The company is also planning to launch Taman Seri Residensi, Klang Phase 3B (landed semi-D – GDV of RM38mil) by 2HFY6/20.

• For future development, Titijaya has a remaining landbank of 155 acres with a combined GDV of about RM9.4bil, located mainly in the Klang Valley. The projects planned for the remaining landbank are Emporia @ Glemnarie (mixed development – GDV of RM1.51bil); Klang Sentral (serviced apartment – GDV of RM700mil); Damai Suria (township – GDV of RM1.48bil); Odeon @ Jalan TAR, KL (serviced apartment & retail mall – GDV of RM1.17bil); 3rdNvenue Phases 3,4 & retail (hig-hrise mixed – GDV of RM997mil); Taman Seri Residensi Phases 3A, 4 & Selangorku (landed residential – GDV of RM161mil); Riveria City @ KL Sentral Phases 2, 3 & retail (integrated development – GDV of RM1.1bil); and Areca @ Batu Maung, Penang (mixed development – GDV of RM2.52bil).

• Management indicated that several ongoing projects have progressed beyond their initial stage of construction, therefore the coming quarters should see a stronger performance. We made no changes to our FY20–FY22 numbers at this juncture. Maintain HOLD.

Source: AmInvest Research - 22 Jan 2020