INVESTMENT HIGHLIGHTS

• Visit to The View Residences sales gallery

• Expect take up rate to improve

• Earnings forecast maintained

• Upgrade to BUY with unchanged TP of RM1.59

Visit to The View Residences sales gallery. We recently visited Magna Prima’s The View Residences sales gallery in Shah Alam. Note that The View Residences is the first new property project launches of Magna Prima in FY17 with GDV of RM271m. The View Residences is a residential condominium on 5.25 acres of leasehold land in Sultan Abdul Aziz Shah Golf Club, Shah Alam. Recall that Magna Prima acquired the land for RM43m back in 2016. The View Residences comprises three 15-storey towers that house 315 condominiums where all the condominium units across the three towers will be able to enjoy golf course view.

Expect the take up rate to improve. Magna Prima has launched first tower of The View Residences in mid-September with selling price between RM730k to RM1.18m for built-ups from 980 sq ft to 1281 sq ft. Magna Prima is offering promotion of 10% discount for all buyers plus additional 7% Bumiputera discounts, giving net selling price for early birds starting from ~RM610k. Take up rate based on booking for the first tower is estimated at 30-40% which is deemed decent considering the project was recently launched. We expect the take up rate to improve due to its good location in Sultan Abdul Aziz Shah Golf Club and its affordable pricing.

Earnings forecast maintained. Post visit to The View Residences sales gallery, we maintain our earnings forecast for Magna Prima as we have already inputted property sales from The View Residences in our new property sales forecast of RM200m. Property sales of Magna Prima will also be driven by sales from Desa Mentari project in Old Klang Road and Boulevard Business Park project in Jalan Kuching.

Upgrade to BUY with unchanged TP of RM1.59, based on 20% discount to fully-diluted RNAV. We upgrade Magna Prima to BUY from Neutral due to its improving sales outlook which should underpin its earnings in FY18. Another potential catalyst for Magna Prima is the value unlocking of its Jalan Ampang land.

Source: MIDF Research - 26 Sept 2017