| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A prominent property developer registered a headline net profit of RM275.1 million in the fourth quarter of fiscal year 2025, significantly surpassing both analyst and consensus expectations. This robust performance marks a substantial year-on-year increase of 165.6% and a quarter-on-quarter surge of 304.4%.
Performance Review
The stellar quarterly results were primarily propelled by substantial gains from land sales, which contributed approximately RM300 million to the Group’s earnings. This positive impact was partially mitigated by an inventory write-down of about RM189 million. Excluding these one-off items, the Group’s underlying net profit of RM367 million was largely in line with analyst and consensus estimates, reaching about 96% of the respective forecasts.
In contrast, the property development segment in fiscal year 2024 saw revenue and pre-tax profit (PBT) decline by 20.5% and 8.5% year-on-year, respectively. This was attributed to a higher base in the previous year, which benefited from major land transactions and strong contributions from international projects in Australia and Vietnam following substantial handovers. Land transactions in FY25 generated RM838 million, a decrease from RM1.46 billion in FY24, with the current year’s lower PBT being consistent with the reduced revenue, albeit supported by improved development profit margins.
Sales Momentum and Future Pipeline
The Group demonstrated strong sales momentum, successfully exceeding its fiscal year 2025 sales target of RM4.8 billion by clinching full-year pre-sales of RM5.11 billion, representing a 2% year-on-year growth. Domestic developments were the main contributor, securing RM3.0 billion, with strong input from the Southern and Central Regions. International projects added RM0.7 billion, accounting for 14% of total sales.
Looking ahead to fiscal year 2026, the developer has set a sales ambition of RM4.6 billion. It plans a robust pipeline of launches totaling RM5.36 billion across 50 projects in Malaysia, with additional projects expected to be unveiled in Vietnam and Australia. Unbilled sales have increased to RM4.5 billion from RM4.1 billion in 3QFY25, providing good earnings visibility. Furthermore, the company aims to list its mature investment assets in the first quarter of calendar year 2027.
Investment Bank’s View
PublicInvest Research maintains a Neutral call on the stock with a target price of RM0.93. This target price is based on an approximate 65% discount to its book value, consistent with the stock’s five-year average discount to book value.
