At a glance, it would appear that Glomac's 9MFY12 results were above our and consensus estimates, but excluding a gain on disposal of an associate, its core net profit was largely within ourexpectation, accounting for 73.2% of ourFY12 forecast. Revenue fell 8.1% y-o-y on completion of Glomac Tower and Glomac Galleria but core net profitspiked up by almost 19% y-o-y, attributed to lower MI charges and improvedmargins. We maintain our forecasts and BUY recommendation at an unchanged FV of RM1.04, based on 0.9x CY12 P/NTA,which is about 1.0''above the stock's 10-year historical mean.
Largely withinforecasts. Glomac reported a net profit of RM63.5m for 9MFY12, which includeda net gain on disposal of its 49% stake in Thailand-based WHA Glomac Alliance CompanyLimited. Excluding this disposal gain, Glomac core net profit stood at RM57.1m, accounting for around73.2% of our FY12 net profit forecast. For 1HFY12, revenue was down by 8.1% y-o-y,largely due to the completion of two of its projects namely Glomac Tower andGlomac Galleria. Despite the marginal revenue drop, core net profit was up byabout 19% y-o-y, attributed to lower MI charges following the completion ofGlomac Tower, which was undertaken by a JCV on a 51:49 basis.
Healthy growth.Glomac recorded total sales more than RM343m for 9MFY12, fuelled by the strongresponse to its township projects in Bandar Saujana Utama and Saujana Rawang,as well as contributions from Glomac Damansara Residences. The company's unbilledsales were healthy and slightly higher at RM588m as at end-3QFY12. Excluding theRM1.4bn worth of properties that the company currently has or will launch inFY12, Glomac has a strong pipeline of strategic projects with a total GDV ofmore than RM3bn for launch beyond FY12. Given its healthy balance sheet, webelieve Glomac would have the financial muscle to acquire more landbank as wellas participate in the privatization of government land.
Maintain BUY. Wemaintain our forecasts and BUY recommendation at an unchanged FV of RM1.04, based on 0.9x CY12P/NTA, which is about 1.0'' above its 10-year historical mean.