Fundamentals still tough. To put things in perspective, the Malaysian property market will still be struggling with supply dwarfing demand going forward. As property developers continue to launch new properties to keep their business operations going, the balance number of unsold units under construction is expected to add to the already high inventory levels of completed properties. On the demand side, there are fewer property buyers as property prices are perceived to be less affordable relative to the mass market especially against a soft economic backdrop. In response, we expect property companies to ramp up their aggressive marketing efforts to help clear the inventory holdings. To shore up their bottom-line, they may also be looking to monetise their non-strategic assets such as disposing of selected land parcels.

While unbilled sales will provide near term earnings visibility… In terms of earnings visibility, this will be underpinned by property sales secured from new launches in recent years, which typically will be booked in over two to three years according to percentage-of completion progress.

Source: Kenanga Research - 2 Jan 2020