What’s New

• Titijaya Land Berhad (Titijaya) announced that the Group will form a JV with Golden Vogue Sdn Bhd, Mohd Hazmil Bin Mohd Kassim and Lim Soo Huen to co-develop a piece of land in Jalan Tuanku Abdul Rahman, KL measuring 2.9 acres.

Comment

• Dispel the earlier concern on the hiccup of the project. We are positive with this JV agreement as it dispels the earlier concern of the project being hit a snag as highlighted by the media whereby there was a ‘For Sale’ signage being put up on the land. However, the new government ruling of idefinite freeze on the development of shopping malls, offices and luxury properties (worth more than RM1m) could prompt the Group to revise its initial plan of building a retail mall on the site.

• Initial plan of RM1.5b mixed development project. To recap, Titijaya plans to have a RM1.5b mixed development property project on this former Odeon Cinema site in the KL city center. The 2.9 acre of land is strategic located in Jln TAR with walking distance to SOGO, Pertama Complex, Dang Wangi Police HQ and Maju Junction mall. We understand that Titijaya targets to commence and launch the project, named Odeon KL in CY2018 by constructing a retail mall and two blocks of serviced apartments with built-up ranging from 450 to 850sf, and an indicative selling price of RM450k/unit onwards. Due to the new government ruling which will come into effect next month, we believe the GDV of the project could be scaled down.

• Profit sharing of development profits. The Group will pay the land owner of 20% of the gross development profit (including land cost). The payment will be throughout the development progress or in advance as may be mutually agreed by both parties.

Earnings Outlook/Revision

• No change to our earnings estimates for FY18- 19F pending official launching of the above project.

Valuation/Recommendation

• Maintain BUY on Titijaya with an unchanged target price of RM2.06, based on 35% discount to its fully-diluted RNAV/share of RM3.17.

• We advise investors to accumulate the share as we believe that the Group is able to fast track its projects execution to ride on the current property recovery. This is backed by its unique business model, landbanking strategy and marketing efforts in targeting mass market segment.

Source: JF Apex Securities Research - 20 Nov 2017