After much delay, Tambun has finally obtained its APDL to launch two new projects. Maintain BUY with an unchanged MYR1.81 TP (28%upside). Both projects have a combined GDV of MYR300m. We expect new sales to grow substantially stronger next year to MYR350m-400m, vs estimated RM220m this year. We keep our positive view on the Penang mainland property market as demand and supply dynamics remain healthy.

• Finally approval obtained. After numerous delays, Tambun Indah Land (Tambun) has finally received its Advertising Permit & Developer License (APDL) last week from the Urban Wellbeing, Housing and Local Government Ministry to launch its new projects. Recall, due to the longwaiting process to obtain the APDL, Tambun had not been able to roll out any new projects this year, except for Raintree Park 1, launched in January. This has negatively affected the company’s property sales this year, with 9M sales achieving only MYR193m, vs full-year MYR429m in 2014. The take-up rate for existing projects has reached 91%.
• Stronger sales growth next year. As the delay has dampened new sales this year, we expect it to grow significantly stronger next year to around MYR350m-400m. Both projects, Avenue Garden and Raintree Park 2, have a combined GDV of MYR300m, and we gather that the average booking rate has already hit 50-60%. We are confident that these projects can sell well, as the recently opened GEMS International School provides good visibility on the growth prospects of the township, and some commercial shops would also be handed over soon. We reiterate that, unlike elsewhere in Malaysia, where demand for properties is sluggish coupled with moderate oversupply issue, Penang mainland market remains healthy. This is because many developers have not been able to release new projects due to the delay in approvals. Given also that the catalytic investments are moving on track, demand for properties is likely to outweigh supply in that area.
• Maintain BUY. As the timing of approval is within our expectation, we make no changes to our forecast which had been revised down earlier. We continue to like Tambun as it is a good proxy for Penang mainland growth story. We maintain our BUY rating and MYR1.81 TP, based on 30% discount to RNAV.

Company Profile Tambun Indah Land (Tambun) is a developer based in Penang mainland. Its flagship township Pearl City is located at Simpang Ampat, 15-min away from the Penang Second Bridge.