TILB’s 2Q13  results  came  in  within  our  expectation.  Property  sales  in 1H  increased  to  MYR343m  from  MYR177m  in  1Q13.  The  Penang  State Government  recently  called  for  request  for  proposal  (RFP)  for  the development of an international theme park and golf course. These are expected  to  lift  the  development  potential  on  the  mainland  to  another level. We, therefore, raise our FV to MYR1.82. Maintain BUY.

- Within expectations. Tambun Indah (TILB)’s 2Q13 results came in line with  our  expectation.  About  62.3%  of  the  revenue  from  the  property development division was contributed by the Pearl City township.   Property  sales  up  to  MYR343m.  1H13  property  sales  surged  94%  to MYR343m  from  MYR177m  in  1Q.  Pearl  Residence  (MYR115m),  Pearl Impian  (MYR49m),  Pearl  Avenue  (MYR48m)  and  Straits  Garden (MYR67m)  were  the  key  contributors.  The  average  take-up  rate achieved at its ongoing projects, with a GDV of MYR1.32bn, was 73.3%.

- Placement exercise completed. TILB recently completed a 15m share placement  to  two  institutional  funds  at  an  issue  price  of  MYR1.32  per share. Its market cap, as a result, rose to MYR515m. An EGM will likely be  held  in  mid-Oct  to  seek  shareholders’ approval for the acquisition of the minority stake in the Pearl City project from Nadayu Properties (NPB; NR). Subsequently, 55m shares will be issued at MYR1.30 per share.

- Forecasts.  We  make  no  changes  to  our  earnings  forecasts.  Unbilled sales  amounted  to  MYR510m  in  2Q13,  from  MYR425m  in  the  previous quarter. TILB’s earnings will be boosted from early-4Q onwards upon the completion  of  the  acquisition  from  Nadayu,  as  the  minority  interest charge in the P&L will be largely eliminated

- Maintain BUY. We raise our FV to MYR1.82 (from MYR1.71), based on a  lower  15%  discount  (from  20%)  to  RNAV.  Further  opportunities  have opened up following the Penang State Government’s recent call for RFP for  the  development  of  an  international  theme  park  and  golf  resort projects at Batu Kawan. Meanwhile, results of the RFP on the premium outlet  are  expected  to  be  announced  over  the  next  few  months. Acknowledging the positive spillover from these developments, the major shareholders of Asas Dunia, which owns 1,500 acres of land on Penang mainland,  has  recently  offered  to  take  over  their  company  at  MYR1.70 per share. 

Source: RHB