LBS: Property Group Delivers Solid Earnings, Future Sales Momentum Strong
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 () |
| Last Traded | RM0.20 |
| Recommendation |
A property developer reported a net profit of RM29.3 million for the third quarter of fiscal year 2025 (3QFY25), reflecting a 6.1% year-on-year and 8.0% quarter-on-quarter increase. This performance was in line with both the investment bank’s and consensus full-year forecasts.
Performance Review
For the first nine months of FY25 (9MFY25), the Group’s net profit reached RM84.6 million, constituting approximately 75% of the full-year profit forecast. Despite the solid quarterly performance, the year-to-date net profit experienced a 9.6% decline year-on-year. This slowdown was primarily due to certain development projects completing or nearing their final stages, resulting in a 9% year-on-year drop in Group property revenue to RM1.04 billion and a 16% year-on-year decline in profit after tax (PAT) to RM117.5 million.
Key development projects within the Klang Valley, including KITA @ Cybersouth, LBS Alam Perdana, Prestige Residence, and Idaman projects, were significant contributors, accounting for 86% of the Group’s revenue in 9MFY25. Their robust performance helped the company maintain profitability amidst the overall revenue adjustments.
Future Outlook and Recommendation
Looking ahead, the developer’s pre-sales momentum is gaining traction. While 9MFY25 pre-sales totaled RM886.7 million (59% of the RM1.5 billion full-year target), updated figures as of November 20, 2025, indicate a substantial increase to RM1.13 billion, achieving about 75% of the FY25 sales target. This trajectory suggests the Group is well on track to meet its sales objectives, supported by new launches predominantly scheduled for the second half of FY25.
The Group also reported RM359 million in bookings and maintained steady unbilled sales of RM1.4 billion in 3QFY25, providing strong revenue visibility for upcoming periods. Projects worth RM1 billion were launched in 9MFY25, with an additional RM1.3 billion earmarked for unveiling in subsequent quarters. Pre-sales were predominantly driven by the Klang Valley (72%), followed by Johor (14%) and Pahang (13%).
TA Securities maintains a recommendation on the stock, with a target price of RM0.25, suggesting a potential upside of 25.0% from the last traded price of RM0.20.
