- We maintain our BUY call on Titijaya Land with an unchanged fair value of RM3.25/share – pegged to an unchanged discount of 25% to its revised NAV/share.

- As expected, Titijaya posted a strong set of 1QFY15 results. Net profit rose 34% YoY to RM23mil or 25% of our FY15F forecast.

- The stronger YoY growth was largely due to a pick-up in property development revenue and new projects kicking in.

- Sequentially, 1QFY14 net profit rose 15% QoQ as the group benefited from higher billings from its Klang projects and the completion of its Subang Parkhomes development.

- Reflecting this upward trend, the group’s EBIT margins improved to 34.9% in 1QFY15 from 30.7% in 4QFY14.

- We retain our FY15F new sales target of RM600mil vs. the RM450mil achieved in FY14.

- This is further backed by robust pipeline of launches worth ~RM700mil coming from the Trio Development in Shah Alam, balance of H2O, Zone Innovation Park, Mutiara Residences, and Seri Alam Residences.

- Moreover, moving into FY15F, Titijaya's share will be supported by an increasingly robust landbanking momentum.

- As at 30 September 2014, the group has yet to utilize c.RM30mil or close to 25% of its IPO proceeds of RM122mil that has been set aside for new landbank.

- This is supported by a net cash buffer of c.RM60mil, which suggests more headroom for landbanking opportunities.

- Titijaya is trading at a steep discount of 49% vis-a-vis its NAV. We believe this is unjustified, given its increasingly prolific track record in sourcing for prime landbank.

- This is supported by a strong pre-sales pipeline, strong balance sheet (FY15F net gearing: 25%) and robust FY15F-17F EPS CAGR of 22%.

Source: AmeSecurities