• Maintain HOLD (TP: RM2.15). Matrix's 1HFY25 revenue fell by 13% YoY to RM601mn, down from RM691mn in 1HFY24. This was due to a reduction in the flagship Sendayan Developments, which saw a 16% YoY decline to RM536mn (1HFY24: RM641mn), driven by the timing of launch recognitions. Meanwhile, Matrix’s 1HFY25 core PATAMI marginally decreased by 0.4% YoY to RM128.1mn (1HFY24: RM128.6mn), partly offset by higher gain on disposal of PPE and investment property, amounting to RM11.5mn. We maintain our HOLD call with a higher TP of RM2.15 (from RM1.99 previously), as we rolled over our valuation to FY26F, pegged at 1.1x P/B to FY26F BVPS of RM1.96. Additionally, we also introduce our earnings forecast for FY27F.

• Key Highlights. On a QoQ basis, revenue and core PATAMI increased by 14.8% and 11.1%, respectively, driven by higher revenue recognition from the property development segment. This growth was led by the company’s flagship Sendayan Developments, where revenue grew by 13.5%, from RM251.7mn to RM285.8mn. Additionally, the company’s Klang Valley developments made a significant contribution, with revenue soaring to RM7.3mn from RM0.8mn, largely due to the commencement of revenue recognition from Levia Residence, the company’s second high-rise development in Kuala Lumpur. Matrix declared a second interim single-tier DPS of 2.75sen for 2QFY25, representing a 51% payout ratio with a yield of 1.22%.

• Earnings Revision. No earning revision.

• Outlook. We anticipate that Matrix will sustain its positive earnings momentum through its ongoing property developments and continuous cost management efforts. This view is supported by the imminent pipeline launch scheduled for FY25F, amounting to RM1.78bn.

Source: BIMB Securities Research - 27 Nov 2024