BRDB's 1QFY12 results were within our expectations, with its net profit making up about 24.9% of our FY12 forecast. Revenue rose 13% y-o-y, attributed to revenue growth in all its business segments while PBT soared 123% y-o-y, buoyed by significantly higher earnings contribution from its property development segment. We maintain our forecast and Trading Buy on BRDB, at an unchanged FV of RM2.98, based on 0.8x FY12 P/NTA. While there are no earnings excitement, the potential disposal of BRDB's investment properties may be an upward catalyst.
Within forecasts. BRDB recorded a net profit of RM12.6m for 1QFY12, which was within our expectation and accounted for about 24.9% of our FY12 forecast. Y-o-y revenue rose 13%, boosted by the higher revenue from all of its business segments. EBIT jumped 49.1% on improved margins, attributed to the bigger revenue contribution from its property development, which generally commands higher margins. Meanwhile, EBIT margin expanded to 18.4% in 1QFY12 compared with 13.9% in 1QFY11.
Segmental performance. Revenue from the company's property development segment jumped 19.8% y-o-y, attributed to the sales of completed units at One Menerung and Troika condominiums, coupled with higher progress billings from on-going projects such as 6CapSquare and Verdana in Kuala Lumpur and Straits View Residences and Elita in Johor. Property investment revenue climbed 17% y-o-y in line with the increased occupancy of Bangsar Shopping Centre, Menara BRDB and Troika Commercial. Meanwhile BRDB's manufacturing division under Mieco recorded 13% y-o-y growth in revenue due to higher demand and production capacity, especially of plain board exports. However, despite the better prices and sales volume, Mieco suffered a loss of RM1.8m in 1QFY12 against a loss of RM1.4m a year ago, mainly undermined by higher raw material costs.
Maintain Trading Buy.We maintain our forecast and Trading Buy on BRDB, but at an unchanged FV of RM2.98, based on 0.8x FY12 P/NTA, which is equivalent to about 1 standard deviation above the stock's P/NTA mean over the last 5 years. While we do not see much excitement in earnings, the potential disposal of the company's investment properties may just be the upward catalyst for the stock.