Glomac’s full-year FY04/13 result came in slightly above expectations. Net profit grew 29% y-o-y, driven by the maiden contribution from its new flagship project, Lakeside Residences. FY14 earnings growth should be healthy, underpinned by Glomac’s MYR888m unbilled sales. We are maintaining our BUY recommendation and fair value of MYR1.55 at this juncture. 
 
- Above expectations.  Glomac’s full-year FY04/13 results came in slightly above expectations at 108% of our full-year estimate. Net profit grew 29% y-o-y, driven by the progress billings for its on-going projects coupled with the maiden contribution from its new flagship project, Lakeside Residences, in 2HFY13. As expected, a final dividend of 3.5 sen was proposed, bringing total FY13 dividend to 6.5 sen. This translates into a decent gross yield of 6.0%.

- Achieved full-year sales of MYR802m. Glomac recorded total sales of MYR283m during 4QFY13, bringing total FY13 sales to a record MYR802m. The largest earnings contributor for the quarter was its Lakeside Residences township project, contributing MYR140m or about half of the total sales recorded.  

- FY14 outlook. Glomac is poised for a healthy earnings growth in FY14, underpinned by the strong unbilled sales of MYR888m as at end-FY13 and expected total sales of MYR850-900m for FY14. FY14 planned launches include about MYR254m new launches for Lakeside Residences and the maiden launch of its new Putrajaya township. Touching on the market speculation that BNM may announce the abolishment of the Developers' Interest Bearing Scheme (DIBS), the management is taking a wait-and-see approach, pending a meeting between the property developers and BNM on the issue this Thursday. 

- Maintain BUY.  Our FY14 earnings forecasts are unchanged for now, and we have introduced our FY15 numbers. The property sector has been sold down recently, largely due to the speculation on the DIBS abolishment. While we do not hope this will happen as the local and regional economic growth has yet to strengthen significantly, we prefer to wait and see until the end of this week. At this juncture, we keep our BUY rating on Glomac and fair value of MYR1.55, based on 20% discount to RNAV.

Source: RHB