Results

• Within expectations: TILB’s FY15 core PATAMI (excluding RM6.7m of revaluation gain) fell by 8% YoY, accounting for 98% of HLIB’s and consensus’ full year forecasts.

Deviations

• None.

Dividends

• None.

Highlights

• FY15 PATAMI fell by 8% YoY mainly due to delay in launching new projects. Tambun only managed to launch Raint ree Park 2 and Avenue Garden in Dec 15 with total GDV of RM320m. Average take up rate from on-going projects remained healthy at 82%.

• New property sales increased from RM22m to RM70m QoQ mainly due to timing launch of Raintree Park 2 in Dec 15 which contributed RM55m of sales. FY15 sales achieved RM263m.

• To recap, Tambun Indah has secured advertising permits and developer licenses (APDL) for Raintree Park2 (GDV: RM222m) and Avenue Garden (GDV: RM95m) in early Dec 15 after delays of more than half a year. We understand that both projects received well response from buyers with latest take up rate of around 50%.

• Avenue Garden is a 17-storey service apartment with 312 residential units. The pricing is attractive at RM300 psf with smaller size units priced around RM230k. Avenue Garden is just located near to GEMS International School.

• Tambun is targeting to launch Pearl Tropika (GDV: RM146m, secured APDL) and Pearl Saujana – Phase 1 (GDV: RM RM103m, pending APDL) in 2016. We opine that the uncertainty on the timing to secure APDL remains the key concern to the company.

Risks

• Continued delay in new project launches.

Forecasts

• Unchanged.

Rating

HOLD

Positives

• : (1) Strong beneficiary of rising land prices in Penang mainland; (2) Pearl City Flagship will provide the main earnings driver; (3) Potential for more RNAV-accretive landbanking exercises.

Negatives

• : (1) High project concentration in Penang; (2) Delay in new project launches.

Valuation

Maintain HOLD on the stock with target price maintained at RM1.39 based on unchanged discount of 40% to RNAV with dividend yield of 5.8%.

Source: Hong Leong Investment Bank Research - 1 Mar 2016