AVALAND: Property Developer Posts Record Earnings on Strategic Growth, Outlook Positive

Property developer Avaland Bhd reported its highest-ever annual net profit in FY24, showcasing robust growth momentum driven by strategic repositioning and operational efficiencies. The company achieved a revenue of RM893.6 million and a net profit of RM98.9 million, marking a significant 50% year-on-year increase. This strong performance was underpinned by advanced construction progress across its ongoing projects and a healthy demand for new launches in 2024, including Casa Embun Phase 2, Amika Residences, Aetas Seputeh, and Anja Residences & Signature Retail.

The turnaround follows a strategic rebranding exercise in 2023, which saw the company implement operational reforms, redefine product branding, and shift towards outsourced construction models. These initiatives have contributed to improved quality and efficiency, fostering a period of sustained growth.

Performance Review and Challenges

While FY24 marked a peak in performance, Avaland’s revenue and net profit moderated in the first half of FY25, declining by 30% and 29% year-on-year respectively, to RM304 million and RM30 million. This moderation was primarily attributed to lower contributions from completed projects and the early stages of sales and construction for recently launched developments. New property sales also softened by 25% year-on-year in 1H25, reaching RM355 million.

Future Outlook and Strategic Strengths

Despite the interim moderation, the company anticipates a rebound in billings during the second half of FY25 as construction and sales progress for its newer projects gain momentum. Avaland maintains an annual sales target of RM800-900 million, supported by plans to launch 2-3 projects each year. Its unbilled sales stood at RM797 million as of 2QFY25, providing near-term revenue visibility.

Strategically, Avaland boasts a substantial landbank of 187 acres with an estimated Gross Development Value (GDV) of RM11.6 billion, slated for development over the next 7-10 years. The company also has a pipeline of RM1.5 billion in launches planned for 2025. Furthermore, its balance sheet remains healthy with a gearing of 0.26x as at 2QFY25, allowing ample room for future land acquisitions and opportunistic deals. The group also successfully completed four projects with a total GDV of RM1.7 billion in 2025, further enhancing its track record.

Investment Recommendation

TA Securities initiated coverage on Avaland Bhd with an Outperform recommendation and a target price of RM0.30 per share. This valuation is pegged at an approximate 60% discount to its book value, aligning with sector peers, and implies a potential upside of 25% from its current price of RM0.24. The firm highlights Avaland’s well-located landbank, healthy unbilled sales, and clear focus on growth areas as key drivers for its positive outlook.