• Lagenda achieved a high 90–95% average take-up rate for its new projects in Kedah, Johor, and Selangor

• YTD new launches amounted to RM1.2bn (+50% YoY), with sales on track to meet its 2024 target of RM1.2bn

• Maintain BUY call and unchanged RNAV-derived target price at RM2.00

Strong Unbilled Sales to Lift 4Q24 Earnings

We reaffirm our positive view of Lagenda’s outlook, buoyed by its robust sales momentum and solid take-up rates across its project launches. Lagenda posted consecutive quarters of record-high sales, driven by strong momentum across its developments in Johor, Kedah, Selangor, and Pahang. As a result, unbilled sales rose to RM835m (+12% QoQ), with Johor contributing the largest share at 34%, followed by Kedah (29%), Perak (21%), and Selangor (15%). We expect stronger sequential 4Q24 earnings momentum underpinned by the increase in unbilled sales.

Set Sight on RM1.2bn Sales Target

Lagenda launched a total GDV of RM1.2bn in 9M24 (+50% YoY), falling short of its full-year planned target of RM2bn for 2024 due to approval delays for its Kulai Phase 1 (RM560m) and Suria Phase 2 (RM161m). However, management plans to launch both projects by 1H25 to capitalise on the strong interest in Johor’s property market. The company remains on track to achieve its 2024 sales target of RM1.2bn (+20% YoY), having secured confirmed sales of RM869m (+9% YoY) in 9M24, with an additional RM307m booking in hand. Lagenda expects to complete the acquisition of 855 acres of land in Sungai Petani, Kedah, by 1Q25. With an estimated GDV of RM1.5–2bn, this will further bolster its remaining GDV land bank to RM13.4bn.

Maintain BUY With TP of RM2.00

We reiterate our BUY rating and unchanged RNAV-derived target price of RM2.00, based on a 20% RNAV discount. Strong demand driven by Lagenda’s expanding footprint across other states, particularly Johor and Kedah, bolstered our BUY rating. We like Lagenda's niche focus on affordable housing and its attractive 7% 2025E dividend yield. Key risks to our BUY call include higher building material prices and lower-than-expected property sales

Source: Phillip Capital Research - 27 Nov 2024