Very healthy cash levels. I think Tambun's selling point now will be the dividend yield cause the cash can finance dividends handsomely for the next 2-3 years...by which point you'd expect the property market to have recovered. Even if the dividend drops to 6 sen a year, if you buy in at current levels you will be getting a yield of nearly 7%. Very hard to beat actually. I foresee a correction in the price soon once it is clear that dividends won't simply fall off a cliff.
Tambun Indah - Missed Sales Target Author: HLInvest | Publish date: Wed, 28 Feb 2018, 09:41 AM
Results Below expectations: TILB’s FY17 core PATAMI of RM82.6m came in below expectations, accounting for 92.6% and 91.5% of HLIB and consensus full year forecasts, respectively. Deviations Mainly due to slower sales and lower-than-expected margin. Dividends None. The final dividend is usually declared after subsequent 1Q results. Highlights QoQ: 4Q17 revenue was down (-14.7%) while core profit contracted by 38.8% due to fewer on-going projects, weaker margin and further dragged by a RM4m provision for the loss of a low cost housing project. YoY: Revenue fell by 26.0% mainly due to fewer on-going projects and lower new sales. Core net profit declined more drastically by 50.6% caused by lower margin product mix. FY17: Core net profit declined by 22.8% on the back of lower revenue (-21.8%) due to lower new sales and fewer on-going projects as some projects were completed in the prior year such as Pearl Residence and Pearl Harmoni. In 4Q17, total new sales achieved was RM30.2m (RM17.8m in 4Q16), bringing FY17 sales to RM146.3m (FY16: RM229m), falling short of full year target at RM180m. Shrinking unbilled sales at only RM66m (cover ratio of 0.24x FY17’s revenue) remains the concern on the sustainability of earnings moving forward. Management is looking to sustain the earnings by improving the average take-up rate (currently at 70%) for its ongoing projects with a total GDV of RM848m. Three new planned projects namely Palma Residency (GDV: RM50m), Permai Residency (GDV: RM53m) and Palm Garden (GDV: RM110m) are set to launch in FY18. Risks Delay in new project launches. Forecasts We reduce our FY18 and FY19 earnings by 7.3% and 6.6%, respectively after factoring in lower sales assumptions. Rating TRADING BUY ↔ ; TP: RM1.23 Maintain TRADING BUY as we believe the retreat of share price is overdone with potential attractive dividend yield of c.8% at below average P/E multiple despite overall soft sentiment on the sector. While the replenishment of unbilled sales may be slow with delay in project launches, TILB remains one of the strong beneficiaries of the rising land prices in Penang mainland with attractive margin. Valuation Target price is lowered to RM1.23 (from RM1.27) based on unchanged discount of 45% to RNAV of RM2.26. Source: Hong Leong Investment Bank Research - 28 Feb 2018
Tambun is oversold and undervalued at current price! Look at its strong balance sheet, cash rich, low debt, current price below NAV, etc. Profits are dropping is because of slowdown in property market, not the company's problems. The bottom line is property market will recover sooner or later. DYODD!
anyone know about the latest unbilled sales in Q1 2018? there is chance that we wont get any dividend in 2018 if their distribution policy is 40% of profit. will looking to cut loss if Q1 result disappointed
Hehehe ...waiting for RM0.75 ....in property, there is a time lag between property construction vs revenue recognition. This means that unbilled sales take about 2 years to be fully recognised. So, this two years will be pretty tough on Tambun. Hence, if wanna hold long long....wait till RM0.75
Having said that, Tambun is still a good company. Competent and honest management. And it's existing 100+ acres of landbank near to Batu Kawan is still a crown jewel.
Hahaha...lowest in 5 years...n not 52 weeks...>45%... below its NTA... that's for asset play...like Bank, Utility, Reit, n others holding big assets. TQ.
Tambun was oversold previously and investors were worried about the election results previously. Now the worries is cleared and seems like the confidence is back!
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nikicheong
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Posted by nikicheong > 2018-02-28 09:23 | Report Abuse
Very healthy cash levels. I think Tambun's selling point now will be the dividend yield cause the cash can finance dividends handsomely for the next 2-3 years...by which point you'd expect the property market to have recovered. Even if the dividend drops to 6 sen a year, if you buy in at current levels you will be getting a yield of nearly 7%. Very hard to beat actually. I foresee a correction in the price soon once it is clear that dividends won't simply fall off a cliff.