LBS Bina’s (LBS) 1QFY23 net profit came in flattish YoY at RM30.5m (+1.1% YoY, +18.9% QoQ). The Group’s 1QFY23 net profit constituted c.25% of our and consensus full year estimates. As at 18 May 2023, it managed to clinch pre sales worth RM498m, driven mainly by projects in the Klang Valley. We believe it is still on track to meet its FY23 sales target of RM2bn with RM2bn launches planned for 2023. Unbilled sales remained healthy at RM2.4bn. All told, we keep our earnings estimates unchanged and reiterate our Outperform call given its attractive investment proposition and entrenched position as a leading player in the domestic mass-market affordable housing segment. Target price is unchanged at RM0.67 (60% discount to NTA), at parity to sector mean discount to NTA on account of its ability to monetize its land bank acquisitions/joint ventures quicker than its peers.

• Sold properties worth RM498m as at 18 May 2023, driven mainly by projects in the Central region (about 92% of total sales), with projects in Pahang and Johor contributing to the remaining sales. Bookings in the pipeline are at about RM692m in 1QFY23. Elsewhere, unbilled sales remained steady at RM2.4bn, down slightly from RM2.5bn a quarter ago. We understand that average take-up rate for the projects launched so far is about 70%.

• RM2bn sales target in FY23. The Group aims to launch 4,021 units from 12 projects in existing developments in FY23, with 51% of the new properties in the Klang Valley, 23% in Johor, 23% in Pahang, and 3% in Perak. The projects in the Klang Valley are link houses and townhouses within KITA Bestari in Cybersouth, Astella terrace houses at the D’Island Residence in Puchong, and Block B of LBS’ Prestige Residence in Seri Kembangan. Elsewhere, the Group is planning to launch more phases of single-storey terrace houses and cluster link houses in Taman Kinding Flora, Chemor, Perak and the Zenit Molek serviced apartment in Taman Molek, the Imperial Garden double-storey semi-detached apartment, and Emerald Garden single-storey linked houses in Bandar Putera Indah in Batu Pahat, Johor. New projects within the Pahang region include the Bayu Hills serviced apartment in Genting Highlands.

Source: PublicInvest Research - 26 May 2023