Matrix Concepts Holdings - Steady Earnings

Date: 
2024-02-26
Firm: 
PUBLIC BANK
Stock: 
Price Target: 
1.80
Price Call: 
HOLD
Last Price: 
1.81
Upside/Downside: 
-0.01 (0.55%)

Matrix Concepts Holdings (MCH) registered 3QFY24 net profit of RM57.2m (+5.2% YoY, -10.6% QoQ). For 9MFY24, Group net profit of RM185.9m (+22.3% YoY) constitutes about 76% and 74%% of our and consensus full year estimates. Sales are still strong with another RM345m sold in 3QFY24, bringing YTD sales to RM961.4m, of which RM796.4m was contributed by its flagship township, Sendayan Developments. The Group’s unbilled sales as of 3QFY24 eased slightly from RM1.3bn to around RM1.2bn, providing substantial earnings visibility for the next 15-18 months. All told, no change to our earnings estimates. With the stock currently hovering near our target price, we downgrade our Outperform call to Neutral with book-value based target price (TP) of RM1.80. That said, the stock is currently offering attractive dividend yield of about 6% currently.

  • 3QFY24 revenue dropped 18.6% YoY to RM363.8m, mainly attributed to lower contribution from the property development segment, which declined by 19.1% YoY to RM286.2m due to the absence of revenue contribution from the Group's Australian and Klang Valley property projects, following the completion of M. Greenvale and The Chambers last year. YTD, it secured new sales totaling about RM961.4m with average take-up rate of 81.2%.
  • FY24 sales target of RM1.1bn, is underpinned by pipeline launches worth RM1.14bn. MCH has launched its serviced apartments project in Cheras (Levia Residences) in 3QFY24 that has estimated gross development value (GDV) of RM532m. We understand that take-up is encouraging with block A of the project already achieving pre-sales bookings above 50%. Elsewhere, the Group’s Indonesian development, Menara Syariah in Pantai Indah Kapuk 2, Jakarta, Indonesia has also been successfully completed end-2023. As reported earlier, MCH is looking to either dispose one block or keep both for recurring income. We understand that MCH had initially expected at least 20% margins if it disposes the two towers outright. Now, we believe the value could be higher, given the land value alone is already transacted at 3x its original cost (MCH’s initial investment of USD31.75m for a 30% stake).

Source: PublicInvest Research - 26 Feb 2024

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