Company Background. Matrix Concepts Holdings’ (Matrix) principal property development business also involves construction, education, hospitality and healthcare. The group has property development projects in the central and southern region of Malaysia, i.e., Negeri Sembilan, Klang Valley and Johor as well as Indonesia and Australia.

Prospects. (i) Strong sales momentum by securing RM305.3mil worth of new property sales in the latest quarter while unbilled sales of RM1.4bil as at 30 June 2023 provides earnings visibility over the next 15-18 months, (ii) The acquisition of a 1,382-acre land in the Malaysian Vision Valley will help the group to tap into strong housing demand in Seremban, ensuring development sustainability beyond 2030, and (iii) Internationally, Matrix is focusing on the development of M333 St. Kilda in Melbourne, Australia with an estimated GDV of RM230mil (A$75mil).

Financial Performance. In 1QFY24, Matrix reported higher revenue of RM331.4mil (+44.6% YoY) with a PAT of RM63.7mil (+37.9% YoY). This was attributed to higher contributions from the property development segment - mainly residential and commercial properties - as construction issues relating to insufficient workers were resolved.

Valuation. Matrix is trading at an attractive FY24F P/E of 7.7x, vs. Bursa Property Index’s 5-year forward average of 13.4x. As a comparison, Malaysian Resources Corporation, involved in property development/management and construction/engineering services-related activities, trades at a much higher FY24F P/E of 28.3x.

Technical Analysis. Matrix’s buying interest is back after it broke out of the 1-month bullish flag pattern a month ago. With the 20- day EMA remaining above its 50-day EMA since the bullish crossover in mid-August, the uptrend may continue in the near term. A bullish bias may emerge above the RM1.48 level, with stop-loss set at RM1.33, below the 18 July low. Towards the upside, the nearterm resistance level is seen at RM1.70, followed by RM1.80.

Source: AmInvest Research - 30 Oct 2023