• Overall, all Property stocks under our coverage came inline with full-year expectations and delivered favorable YoY earnings growth, driven by stronger property sales and notable progress in construction projects.

• We anticipate the property sector outlook to remain robust for the remainder of FY24 and carry over into FY25 supported by 1) the incentive of the Housing Credit Guarantee Scheme, 2) the introduction of 100% stamp duty waiver on transfer instruments and loan agreements for properties priced at RM500,000 or below, and 3) salary hike for civil servants.

• Maintain an OVERWEIGHT stance on the Property particularly on affordable housing players. We have BUY recommendations for Mah Sing (TP: RM2.19), Lagenda (TP: RM1.48), and Simeprop (TP: RM1.73), while maintaining a HOLD call on Matrix with a higher target price of RM2.15 (up from RM1.99).

Overall Sales Performance Consistently Strong

The recent corporate earnings season delivered favourable outcomes for property companies, as all four companies under our coverage met expectations. The strong YoY performance was primarily driven by robust property sales and significant progress in construction projects. Simeprop achieved a record 9-month sales performance, with property sales rising to RM3.2bn, reflecting a 25% YoY increase. This milestone represents 91% of the group's FY24 sales target of RM3.5bn. Meanwhile, Lagenda posted a record high quarterly property sales of RM349mn, driven by strong contributions from Perak, Johor, and Selangor. For the 9M24, sales totalled RM869mn, a 9% YoY increase, highlighting the success of its affordable housing model across Malaysia. Mah Sing recorded RM1.85bn in property sales during the 9M24 and remains on track to meet its RM2.5bn sales target for the year. This was supported by strong demand for affordable residential properties under its M-Series, especially from first-time and young buyers. Matrix also maintained strong sales momentum, with new property sales reaching RM341.7mn for the quarter. This performance was largely driven by Sendayan Developments, which contributed 86.3% of total sales. As of 30 Sep 2024, Matrix's unbilled sales stood at RM1.3bn, providing substantial earnings visibility for the next 15–18 months.

Strong Sales Momentum Set to Continue Through 4Q24

We expect the Housing Credit Guarantee Scheme to drive first-time homeownership and continue stimulating growth in the residential real estate sector in 4QFY24. Additionally, the introduction of a 100% stamp duty waiver on properties priced below RM500,000 and a salary hike for civil servants (effective Dec 1, 2024) are anticipated to boost economic activity and support the property market through 4QFY24 to FY25. Besides, we expect ongoing infrastructure projects, including the Penang LRT Mutiara Line, resumption of LRT3 station construction, and increased investment in data centers, would drive mixed-use developments, raise property values, and increase demand for residential and industrial real estate.

Maintain OVERWEIGHT Call on Property Sector

We maintain an OVERWEIGHT stance on the Property sector. We have BUY calls on Mah Sing (TP: RM2.19), Lagenda (TP: RM1.48), and Simeprop (TP: RM1.73), while a HOLD call for Matrix (TP: RM2.15).

Source: BIMB Securities Research - 3 Dec 2024