• Maintain BUY, new MYR0.64 from MYR0.63 TP, 48% upside with c.2% yield. LBS Bina plans to develop two pieces of land measuring c.309.95 acres, into a mixed development project worth MYR9.0bn GDV. It will comprise residential, tourism activities, and amenities. Given its past success in developing projects in the area, we think LBS should receive a similar response from the market once the project is launched. Given the size of the development, our TP is raised to MYR0.64.

• Buys new land in Bentong, Pahang. Casa Inspirasi, a 69%-owned subsidiary of LBS Bina, signed a sale and purchase agreement (SPA) with Perbadanan Setiausaha Kerajaan Pahang (PSKP) to purchase two plots of 99-year leasehold land measuring 309.95 acres in Bentong, Pahang for a total consideration of MYR97.8m. The price translates to a land cost of MYR7.24 psf, which seems rather attractive. The consideration is to be paid over a period of 36 months and LBS plans to fund the land via a combination of internal funds and bank borrowings.

• Strategic location. The land is located near notable landmarks such as Genting Highlands and Genting Premium Outlet with convenient connectivity and infrastructure. The location is also attractive for the year- round cool weather. The land is also close to LBS’ Midhills serviced apartment and its flagship SCAPES Hotel. We believe the mixed development will receive positive demand given the high visitor traffic at the tourist hotspot.

• Mixed development. The MYR9.0bn GDV is a preliminary estimate, according to management. LBS intends to develop the land into a mixed development consisting of residential serviced apartments, double storey terrace houses, bungalows, tourism activities, and amenities such as schools and hospital. The indicative selling prices would be slightly lower than the going price for new developments in Genting.

• No changes to earnings for now. The SPA is conditional upon approvals from the relevant authorities. We make no changes to our FY22-24F earnings as billings may take a few years to kick in.

• Maintain BUY, new MYR0.64 TP from MYR0.63. Our TP is based on a 60% discount to RNAV. There is a 0% ESG premium/discount applied as our ESG score of 3.0 for the company is on par with our country median.

Source: RHB Research - 25 Jul 2022