4QFY15 results came in above our expectations, supported by strong progress billings. We maintain our BUY call and RNAV-based TP of MYR2.52 (21% upside), pending a briefing today. We note, however, that its new sales of MYR460m for FY15 missed management’s MYR500m guidance due to weak consumer sentiment and we expect softer sales to continue in the short term.

• Beats expectations. Hua Yang’s 4QFY15 (Mar) core profit of MYR29.7m (-21.5% YoY, -4.0% QoQ) brought FY15 core profit to MYR110.6m (+35.5% YoY), coming in above our and consensus estimates at about 107% of full-year forecasts. YoY revenue grew 14.5%, underpinned by the progress billings from its ongoing township projects such as Bandar Universiti Seri Iskandar (BUSI), One South (OS), Metia Residences (MR) and Sentrio Suites (SS). Hua Yang also declared a final dividend of 8 sen, bringing total FY15 dividend to 13 sen, translating into a decent yield of 6.2%.
• Misses its full-year sales target. Total new sales for FY15 of MYR460.2m fell short of the company’s MYR500m target. Management acknowledged that sales were affected by weak consumer sentiment leading up to the goods and services tax (GST) as well as stringent bank lending policies. Note that its township projects such as BUSI and Taman Pulai Hijauan made up almost half of the total new sales. Meanwhile, unbilled sales remained strong at MYR701.8m (3QFY15: MYR733.3m), with its Klang Valley projects (namely OS, MR and SS) still making up close to 70% of the unbilled sales amount. Net gearing remained stable at 0.49x.
• Earnings forecasts. We retain our FY16-17 earnings forecasts pending a briefing later today. We introduce our FY18 numbers.
• Maintain BUY. Our TP is maintained at MYR2.52, based on an unchanged 25% discount to RNAV, pending today’s briefing. Hua Yang’s multiple acquisitions in recent months have strengthened its commitment to replenishing its GDV for future growth. The company will also likely continue to fare better than some of its peers given its affordable productofferings, in our view.