PRIMA: Strong Half-Year Performance Driven by Strategic Launches, Positive Outlook Maintained
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
Performance Review
The property developer’s 1HFY26 PATAMI of RM10.8 million met expectations, representing 20% of the full-year forecast. While revenue and earnings saw a year-on-year decline of 30.3% and 45.4% respectively, primarily due to the completion of earlier projects like EdgeWood and SkyVogue Residences, the company demonstrated robust quarter-on-quarter growth, with revenue up 16.2% and PATAMI more than doubling (>100%). This sequential growth was largely driven by higher progressive revenue recognition from Vesta Residences and contributions from newly launched projects such as SkyAman 1 Residences in Cheras.
Despite an increase in operating expenses (OPEX), marginal year-on-year declines in EBITDA and EBIT margins were observed, supported by a stronger gross profit margin. The margin expansion was particularly attributable to higher-margin contributions from Vesta Residences and SkyAman 1, where early-stage progressive billing typically enhances profitability. The company declared a lower interim dividend per share of 0.22 sen, consistent with its formal dividend policy of a minimum 20% payout.
Future Outlook
A stronger second half of FY26 is anticipated, buoyed by the recent launches of key projects including SkyAman 1 (Cheras), SkyAwani PRIMA (Brickfields), and SkyAwani 6 (Setapak), which collectively boast a gross development value (GDV) of RM843.5 million. Further enhancing the pipeline is the upcoming launch of SkyAwani Pearlmont in Seberang Jaya, with an estimated GDV of RM592 million, expected in 3QFY26.
Unbilled property sales remain solid at RM589 million, marking a 22% quarter-on-quarter increase. Since its July 2023 listing, the company has achieved RM2.0 billion in GDV delivery, accounting for 43% of its cumulative RM4.6 billion GDV commitments through 2026. Earnings visibility is further reinforced by an upcoming RM2.6 billion GDV launch pipeline and the adoption of Prefabricated Prefinished Volumetric Construction (PPVC) technology, which is expected to enhance execution efficiency and support future growth.
Recommendation
The investment bank maintains its earnings forecast, anticipating a higher revenue pick-up in 2HFY26. A “BUY” recommendation is reiterated for the stock with an unchanged RNAV-derived target price of RM0.59. This positive outlook is underpinned by the company’s strong position in the affordable housing segment, resilient demand, supportive government policies, and robust earnings visibility.
