• Maintain BUY and MYR2.02 TP, 13% upside and c.6% FY25F (Mar) yield. Matrix Concepts’ 4QFY24 results were within expectations. Developments in Sendayan remained the key earnings growth driver and 50% dividend payout was intact. FY24 property sales amounted to MYR1.25bn and management has set a new sales target of MYR1.3bn for FY25. Key catalysts for the stock include the potential revival of the KL-Singapore High Speed Rail project as well as major landbank acquisitions.

• 4QFY24 results. The sequential growth in revenue was mainly driven by stronger sales and higher progress billings from all the township projects in Sendayan. However, gross margin was lower at 50% vs 54% in the previous quarter, due to the different product mix. Note that PBT was lifted by a MYR12.1m one-off reversal impairment on other receivables (arising from advances to Pusat Perubatan Mawar earlier), as well as MYR7.1m property development cost written off (Damansara Perdana land) and MYR3.3m impairment loss on another receivable (on a land acquisition). We deem these one-offs as core operating items as the MYR12.1m was treated as a core item earlier, and MYR7.1m development land written off is expected to affect future profitability of the project. A fourth interim single-tier dividend of 2.5 sen was declared, bringing the full-year DPS to 10 sen (vs 9.25 sen in FY23), representing 50.8% of headline net profit. The company remains in a net cash position.

• Decent sales in 4QFY24. 4QFY24 property sales reached MYR286.6m vs MYR345.3m in 3QFY24. Full year total property sales hit MYR1.25bn compared to MYR1.2bn achieved in FY23. Townships in Sendayan contributed MYR1bn to the FY24 total sales, while Bandar Seri Impian only contributed MYR52.8m. Levia Residences in Cheras, which was launched in 3QFY24 generated MYR111.7m in sales. The take-up rate for Tower A has already reached 55%. Meanwhile, Eka Heights 3A, which was launched in the previous quarter, is now 87.3% sold (from only 37.8% in 3QFY24).

• MYR1.65bn projects to be launched in FY25. Management has set a decent sales target of MYR1.3bn for FY25, on the back of MYR1.65bn worth of new launches. The major projects include various phases in the existing Eka Heights and Laman Sendayan, and possibly Tower B at Levia Residence.

• Forecasts. We make minimal adjustments in our earnings forecasts. Unbilled sales remained unchanged at MYR1.2bn.

• Maintain TP. Our TP is based on an unchanged 30% discount to RNAV, and 2% ESG premium given our ESG score of 3.1 for the company.

Source: RHB Research - 28 May 2024