MATRIX: Property Developer Meets Expectations on Robust Revenue Growth, Outlook Steady

A prominent property developer reported a net profit of RM67.5 million for the second quarter of financial year 2026 (2QFY26), a performance that remained largely flat year-on-year but represented a 7.3% increase quarter-on-quarter. The results were in line with both the investment bank’s and consensus estimates, with the first half of FY26 net profit of RM130.4 million accounting for 53% and 52% of their respective full-year forecasts.

Revenue for 2QFY26 saw a significant uplift, climbing 23.4% year-on-year to RM396.3 million. This growth was primarily fueled by strong revenue recognition from the property development segment, which itself surged by 25.9% year-on-year to RM381.0 million. Key contributors to this impressive revenue performance included its second high-rise project, Levia Residence, particularly the encouraging sales of Phase 1 and 2. Additionally, recently completed overseas development in Australia (M333 St Kilda) and contributions from the Horizon L&L acquisition in August 2025 further bolstered the top-line figures. The company’s flagship township, Sendayan Developments, continued to be a major revenue generator, contributing 57.1% of total revenue.

Future Outlook Remains Positive

The company’s unbilled sales stood at a healthy RM1.6 billion as of September 30, 2025, providing strong earnings visibility for the next 15 to 18 months. Pre-sales for 2QFY26 reached RM406.96 million, bringing the year-to-date total to approximately RM788.4 million, roughly 49% of its FY26 sales target of RM1.6 billion.

Looking ahead, the group has significantly raised its FY26F launch target to RM2.3 billion, up from the previously guided RM1.7 billion. Approximately RM1.4 billion in projects have already been launched in 1HFY26, with an additional RM880 million expected in 2HFY26. These upcoming launches are set to include new phases within its established Sendayan Developments, initial revenue recognition from Malaysia Vision Valley (MVV) City, and new developments at Levia Residence in Puchong.

Internationally, the Indonesian development, Menara Syariah in Pantai Indah Kapuk 2, Jakarta, was successfully completed at the end of 2023. The company is exploring options to either dispose of one block or retain both blocks for recurring income, with the value believed to be potentially higher than initially expected, given the substantial increase in land value alone.

Investment Recommendation

The investment bank maintains a Neutral rating on the stock with an unchanged target price of RM1.40. This target price is pegged at a circa 20% premium to its book value, deemed justifiable given the company’s consistent earnings delivery and attractive dividend yields, historically around 4.5%. A dividend of 1.75 sen was announced for 2QFY26, consistent with the previous quarter.