- We maintain our BUY call on Titijaya Land with a lower fair value of RM3.10/share (vs. RM3.25/share previously) pegged to an unchanged 25% discount to its NAV/share, following a downward revision to our earnings forecast post its 2QFY15 results.

- Titijaya recorded 2QFY15 net profit of RM18mil on the back of RM66mil in revenue. This took 1HFY15 earnings to RM41mil (+25% YoY). During the quarter, property billings fell ~25% QoQ as work progress for some of its projects was hampered by heavy rainfall during the monsoon season.

- Accordingly, we have lowered our FY15F net profit forecast by 10% (RM81mil) to mainly factor in the slower property billings in 1H.

- We have also toned down our FY15F new sales and pre-sales assumptions to RM700mil (previous: RM1bil) and RM530mil (previous: RM500mil), respectively, in light of some near-term challenges in the property market.

- The group achieved new property sales of RM275mil in 1HFY15. Key contributors include H20 Block A, 3 Element SoHo & SoFo, Subang Parkhomes Phase 1, Embun/Eumery @ Kemensah and its Klang-based projects.

- Nevertheless, sequential earnings momentum is set to recover moving into FY16F with net profit rising to RM100mil (+24% YoY) as work progress improves along with better weather conditions. This is anchored by a healthy unbilled sales buffer of ~RM700mil or ~2.5x its FY14 property revenue.

- More importantly, we understand that upcoming launches for 2015 will include Block B of its H20 project in Ara Damansara (RM191mil), Emporia Soho and Office Suites in Shah Alam (RM225mil) and Emery Kemensah (RM98mil).

- Furthermore, newsflow momentum should be supported by updates of its two prime pieces of land in KL Sentral and Jln. Eaton in the coming months, which mark its progression into the high-end residential market.

- Furthermore, Titijaya’s balance sheet remains strong with a net cash position of ~RM28mil as at 31 December 2014. This puts the group in a sweet spot to pursue more value-accretive landbank/projects in the near future.

Source: AmeSecurities