LBS Bina (LBS) registered a better-than-expected 4QFY21 net profit of RM35.5m (+71.6% YoY, +96.1% QoQ) which beat our and consensus expectations. Group FY21 net profit of RM95.1m surpassed our and consensus full year estimates by more than 20% mainly due to higher than expected sale of inventories, good take up rates and faster billings from its on-going development projects. LBS also surpassed its RM1.2bn sales target in FY21, ending the year with RM 1.58bn in property sales. It aims for RM1.6bn property sales in FY22 from 14 new project launches with GDV totaling RM1.77bn. Unbilled sales currently stands at RM2.3bn. FY22-23 earnings are adjusted higher by 5%-25% after billing revisions and higher sales imputed. Maintain our Outperform call given its attractive investment proposition and entrenched position as a leading player in the domestic mass-market affordable housing segment. Target price is unchanged at RM0.69 (50% discount to fully-diluted RNAV), with the lower discount vis-à-vis its peers on account of its ability to monetize its land bank acquisitions/joint ventures quicker than the rest.

• Surpasses FY21 sale target. LBS surpassed its RM1.2bn sales target in FY21, ending the year with RM 1.58bn in property sales. Klang Valley constituted 90% of the new sales secured in FY21, with the remaining 6% from Johor, 3% from Pahang and 1% from Perak. The Group aims to sell RM1.6bn in FY22, with RM127m already sold in the Jan-Feb 2022 period.

• To launch RM1.77bn worth of projects. The Group plans to launch 14 new projects in 2022 – which will cover Klang Valley, Johor, Pahang and Perak – amounting to 3,733 units with a GDV of RM1.77bn. In Klang Valley, LBS intends to launch 2,604 units with a total GDV of RM1.11bn in projects such as KITA @ Cybersouth township (2,128 units with RM853m in GDV), a new phase of Melodi Perdana serviced apartments at the LBS Alam Perdana township(321 units and a total GDV of RM120m) and Astella at D’Island Residence (155 units and a total GDV of RM132m).
  
  Elsewhere, new projects include the Bayu Hills apartment in Genting Highlands (642 units with GDV of RM492m); Taman Kinding Flora single storey cluster link and terrace houses in Chemor, Perak (248 units with GDV of RM64m) and the Emerald Garden 3 single storey terrace houses, Royal Garden double storey Semi-D houses and Laman Bayu 4 double storey terrace house in Bandar Putera Indah, Johor (239 units with a total GDV of RM108m).

Source: PublicInvest Research - 25 Feb 2022