• Revised to BUY with a higher target price (TP: RM1.99). Matrix's FY24 revenue surged to RM1.34bn, marking a 20.4% YoY increase. This growth was driven by a robust performance in the property development segment. Core net profit surged by 18.9% YoY to RM246.5mn, which was 112% of our expectations. The company achieved a stable PAT margin of 18%, driven by additional income sources, especially from the healthcare segment through Pusat Perubatan Mawar. Given the encouraging performance, we revised our recommendation from HOLD to a BUY call with a higher TP of RM1.99 (from RM1.81), pegged at 1.1x P/B to FY25F BVPS of RM1.81.

• Key highlights. Matrix’s 4QFY24 revenue surged to RM353.1mn, marking a 19.3% QoQ increase. This significant rise was mainly due to higher contributions from its property development unit, with Sendayan Developments recognising RM326.8mn in revenue, a 21.8% increase from the previous quarter. This growth was driven by improved completion rates and favorable product mix recognition strategies. The company’s core profit after tax increased by 5.9% to RM60.6mn, up from RM57.2mn in the previous quarter. This growth aligns with the overall revenue improvement and is further supported by other income streams, particularly from the healthcare segment through the operations of Pusat Perubatan Mawar. The company also declared a fourth interim single-tier dividend of 2.50sen for 4QFY24. This results in a total dividend per share of 10sen, with a yield of 5%, representing a 50.8% payout ratio for FY24.

• Earnings Revision. No earning revision.

• Outlook. We anticipate that Matrix will sustain its positive earnings momentum through its ongoing property developments. This expectation is further bolstered by the imminent pipeline launch scheduled for FY25, amounting to RM1.65bn, which is 1.25 times that of FY24. Meanwhile, Matrix enjoys healthy contributions from its healthcare unit, and this income stream is expected to strengthen due to an anticipated increase in patient beds over the next 12 months.

Source: BIMB Securities Research - 28 May 2024