We expect affordable housing demand to be more resilient and Matrix’s attractive dividend yield of >5% would continue to support its share price. Maintain BUY with a MYR2.73 TP (12% upside). 12M new sales of MYR805.5m surpassed management’s MYR700m target, mainly contributed from property sales as the weak economic growth has slowed industrial sales more severely.

MYR193.7m new sales in 4Q, slightly down from MYR244.5m in 3Q, bringing 12M new sales to MYR805.5m (vs MYR630.2m in FY14), exceeding management’s expectation of MYR700m. Outlook for industrial land sale remains challenging due to the economic slowdown in the region. The take-up rate for projects launched in 2015 continues to improve, with Hijayu 3B (Phase 1) achieving 92% from 83% in 3Q, while Hijayu Resorts Homes (Phase 1A) was 56% (from 45%). Newer projects such as Suriaman 1 Phases 1 & 2 are now 58% sold, while Impiana Bayu 2 @ Taman Sri Impian is 65% sold. Pipeline launches. A total of MYR1bn worth of new projects is scheduled for FY16, including Residensi SIGC (GDV: MYR250m), about 300 units of affordable housing in Kota Gadong, as well as new phases in the existing Bandar Sri Sendayan and Taman Sri Impian. These are mainly within the mid-priced range. Forecast. We make no changes in our earnings forecast. Unbilled sales stayed resilient at MYR633.2m (vs. MYR640.5m in 3Q). Key risk: worst-than-expected economic conditions. Maintain BUY. We maintain our BUY rating and MYR2.73 TP, based on 20% discount to RNAV.

4Q results within expectation. Matrix Concepts (Matrix)’s 4Q15 earnings were within our and market expectations (Matrix has changed its FYE to Mar from Dec). During the quarter, revenue was mainly contributed by property sales while its industrial land sales were still lacking. A MYR4.3m contribution was derived from investment properties (clubhouse and school), but it is still in the red at EBIT level. Net gearing stands at 9%, inching up slightly from 7% in 3Q. A 3.75 sen single-tier dividend was declared for the quarter.

SWOT Analysis

Source: RHB Research - 25 Feb 2016