SKYWLD: Property Developer Signals Stronger Performance Ahead on Robust Sales and Strategic Growth
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A leading property developer has demonstrated significant sales and launch momentum in the second quarter of FY26, signaling a strong recovery trajectory despite a 48% year-on-year decline in core net profit for the first half of FY26. The dip in first-half profitability was primarily attributed to fewer contributing ongoing projects and higher financing costs incurred from medium-term notes issuance. However, management maintains an optimistic outlook for a robust second half, anticipating a return to stronger earnings.
Performance Review
Sales activities in 2QFY26 surged by 61.4% quarter-on-quarter to RM164.8 million, contributing to first-half sales of RM266.9 million. This strong performance led to an impressive overall take-up rate of 94.2% across active projects. The reactivation of the project pipeline with the launch of SkyAman I Residences in August 2025 marked the first new launch in nearly two years, achieving a promising 21% take-up within two months and solid construction progress, marking a confident restart to its development cycle.
Ongoing projects such as Curvo Residences and Vesta Residences continued to advance steadily, with take-up rates improving to 70% and 87% respectively. Construction for Vesta Residences is progressing to 27% under a newly appointed contractor, with management confident of handing over the project in the next financial year.
Future Outlook and Pipeline
Launch momentum is set to accelerate further in 2HFY26, underpinned by strong demand for newly introduced projects. SkyAwani PRIMA in Brickfields (GDV RM211mn), launched in October 2025, has achieved around 80% bookings, while SkyAwani 6 in Setapak (GDV RM204mn), which opened for signing in November 2025, is about 70% booked. Upcoming launches, including Silverlake Residences and SkyAwani Pearlmont, are expected to further drive sales momentum, with management particularly positive about SkyAwani Pearlmont, targeting at least 50% take-up upon its official launch in January 2026.
Management has expressed confidence in delivering a stronger second half for FY26, supported by an increase in unbilled sales, normalizing construction progress, and sustained sales momentum across key projects. Unbilled sales rose to RM589 million by end-September 2025, providing solid earnings visibility for the next 12 to 18 months. Stronger progress billings are anticipated from Curvo, Vesta, and SkyAman I as site activity intensifies and new launches contribute.
Strategic Growth Initiatives
In terms of long-term growth, the developer reported steady progress on strategic initiatives, including its Prefabricated Prefinished Volumetric Construction (PPVC) facility in Seberang Perai Tengah, with construction expected to start in 4QFY26 and operations targeted by 3QFY27. International ventures in Vietnam also remain on track following the amended SPA for the District 8 site in May 2025, enhancing the group’s scalability and margin sustainability.
Investment View
TA SECURITIES maintains a “BUY” recommendation for the stock, reiterating an unchanged target price of RM0.70 per share, based on 0.7x CY26 P/B. This valuation incorporates a +3% ESG premium, reflecting the developer’s commendable 4-star ESG rating. The investment bank’s forecasts for FY26-FY28 earnings remain unchanged, with new sales assumptions of RM1.0-1.6 billion for FY26 deemed achievable, representing about 45% take-up of planned new launches. Management aims to sustain annual launches of around RM2.0 billion, which underpins a projected 35% core net profit CAGR over FY25-FY28.
