Matrix’s 1Q15 results came in line with our and market expectation s. We maintain our BUY rating and MYR3.65 TP (12% upside). 1Q15 earnings saw a spike, mainly due to the early settlement of industrial land transactions before the implementation of the GST. New sales of MYR157m were achieved, on track to hit management’s full-year target of MYR600m. We make no changes to our earnings forecast.

• Within expectations. Matrix Concepts’ (Matrix) 1Q15 earnings met our and market expectations, as we note that the spike in 1Q earnings will not be recurring as it was largely frontloaded due to accelerated payments by industrial land buyers to settle the transactions before the goods and services tax (GST) kicked in from Apr 2015. Of the total revenue of MYR318m, MYR221m was contributed by the property development segment, while industrial land sales made up the balance.
• MYR156.8m new sales in 1Q. Matrix achieved new sales of MYR157m in 1Q15, from MYR182m in 4Q14. The amount was solely contributed bythe property development segment (none from industrial land sales), and is on track to hit management’s MYR600m target, on top of the MYR100m-150m industrial land sales. Based on our recent conversation with management, industrial land deals may come in more materiallyonly in 2H, due to the timing of approval by foreign industrial players.Sales from recent launches continued to pick up, albeit at a slower pace.Take-up rate for Hijayu 3A (Phase 3) has reached 68% (4Q14: 46%) and Hijayu 3A (Phase 4) has hit 32% (4Q14: 10%), while shop lots inSendayan Merchant Square 1 (Phase 1) are 40% sold. The operation of the new clubhouse and Matrix Global Schools will be able to help accelerate sales, in our view.
• Forecast. We make no changes to our earnings forecast. We expect 2Q and 3Q earnings to be weaker as some of the earnings were brought forward to 1Q. Unbilled sales declined slightly to MYR392m from MYR429.3m in 4Q14.
• Maintain BUY. We continue to like the company given its niche in affordable housing, lucrative industrial segment and attractive dividend yield of about 6%. We maintain our BUY rating with an unchanged TP of MYR3.65, based on a 15% discount to RNAV.