PUBLIC INVESTMENT BANK
PublicInvest Research Company Update
LBS BINA GROUP BERHAD: Acquiring 192.32-acre land for RM1.2bn
DESCRIPTION
Mid-sized property developer with 3,587 acres of developable land in Selangor, Johor, Pahang and Perak.
- 12-Month Target PriceRM0.67
- Current PriceRM0.46
- Expected Return46%
- Previous Target PriceRM0.67
- MarketMain
- SectorProperty
- Bursa Code5789
- Bloomberg TickerLBS MK
- Shariah-compliantYes
SHARE PRICE CHART
Chart shows price movement from approximately 0.45 to 0.50 between January and July 2025.
52 Week Range (RM): 0.51 – 0.89
Month Average Vol (‘000): 3,052.1
SHARE PRICE PERFORMANCE
| 1M | 3M | 12M | |
|---|---|---|---|
| Absolute Returns | -0.9 | -0.8 | -11.5 |
| Relative Returns | -1.8 | 4.3 | -15.2 |
KEY STOCK DATA
- Market Capitalisation (RMm): 711.1
- No. of Shares (m): 1,545.8
MAJOR SHAREHOLDERS (%)
- Gaterich Sdn Bhd: 37.0
- Kumpulan Wang Amanah Persaraan: 9.0
- Lim Wee Chai: 3.5
LBS Bina (LBS) announced that through LBS Kwasa Damansara Sdn Bhd, a wholly-owned subsidiary of LBS Bina Holdings Sdn Bhd has entered into a conditional development rights agreement (DRA) with Kwasa Land Sdn Bhd as the master developer and registered proprietor (KLSB) for the proposed development of a total of 11 parcels of freehold lands registered under the name of KLSB, measuring c. 192.32 acres in total area for RM1.216bn. We are positive with the latest land deal, which is strategically located within the freehold township in Kwasa Damansara. The deal, we understand, will be paid progressively over 10 years, with the first bulk payment in July 2026, which would allow the Group to develop the earlier phases and recycle the profits to finance future tranches. The purchase price also appears to be fair, at about 15% of estimated gross development value (GDV) of RM8.3bn. As such, we believe its balance sheets will not be strained as much even though the capital commitment for land deal is huge. Details are still light for now, and the Group expects the project to commence in 2027 and probably taking 14 years to complete. As such, we keep our earnings estimates unchanged for now. We maintain our Outperform with unchanged TP of RM0.67 (c.30% discount to NTA).
- Land details. The 11 parcels of land, which currently still under agricultural land status, are situated within KLSB’s freehold township located in Kwasa Damansara. Under the DRA, LBSKD is appointed as the developer responsible for the Development Lands. All plots are under the jurisdiction of the Majlis Bandaraya Petaling Jaya. The aggregate market value for the Development Lands is RM1.244 bn based on the latest market valuation. The Proposed Development Rights to be acquired by LBSKD are expected to entail a proposed development of residential project comprising 2,922 units across various property types on the Development Lands. We understand that KLSB has obtained the Kebenaran Merancang endorsed by the Majlis Bandaraya Petaling Jaya and the other appropriate authorities on 1 August 2021 and duly extended on 21 October 2022 for the entire Kwasa Damansara township consisting of 1,660.38 acres. Subject to obtaining the relevant approvals and licences, the Development is expected to commence in year 2027 and is envisaged to take up to 14 years to complete. The estimated total GDV is c.RM8.3bn, whilst its gross development cost is expected to be c.RM6.6bn.
KEY FORECAST TABLE
| FYE Dec (RM m) | 2023A | 2024A | 2025F | 2026F | 2027F | CAGR (%) |
|---|---|---|---|---|---|---|
| Revenue | 1,806.1 | 1,434.7 | 1,471.5 | 1,508.0 | 1,550.0 | -3.8% |
| Operating Profit | 314.3 | 417.6 | 258.2 | 262.4 | 280.0 | -2.8% |
| Pre-tax Profit | 249.4 | 353.0 | 205.9 | 210.9 | 229.4 | -2.1% |
| Net Profit | 146.9 | 240.2 | 112.9 | 116.2 | 130.4 | -2.9% |
| EPS (Sen) | 9.5 | 15.5 | 7.3 | 7.5 | 8.4 | -2.9% |
| FD EPS (Sen) | 8.9 | 14.6 | 6.9 | 7.1 | 7.9 | -2.9% |
| P/E (x) | 5.1 | 3.1 | 6.6 | 6.4 | 5.7 | |
| FD P/E (x) | 5.4 | 3.3 | 7.0 | 6.8 | 6.1 | |
| DPS (Sen) | 2.0 | 2.0 | 2.0 | 2.0 | 2.0 | |
| Dividend Yield (%) | 4.2 | 4.2 | 4.2 | 4.2 | 4.2 |
Source: Company, PublicInvest Research estimates
Table 1: Pipeline Launches
| Project | Expected Launch | Total units | Total GDV |
|---|---|---|---|
| Telok Gong | Q2 | 29 | 427 |
| Alam Eprdana | Q3,Q4 | 1,325 | 559 |
| Shah Alam (MBI) | Q3,Q4 | 413 | 117 |
| D’Island Residence | Q3,Q4 | 79 | 76 |
| Bandar Saujana Putra | Q4 | 790 | 327 |
| Bandar Putera Indah | Q2 | 33 | 23 |
| Cameron Centrum | Q4/Jan2025 | 758 | 543 |
| Rimbawan | Q3,Q4 | 277 | 433 |
| Taman Kampar Puteri | Q3 | 192 | 54 |
| Total | 3,896 | 2,559 |
Source: Company, PublicInvest Research
KEY FINANCIAL DATA
| INCOME STATEMENT DATA (FYE Dec, RM m) | 2023A | 2024A | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| Revenue | 1,806.1 | 1,434.7 | 1,471.5 | 1,508.0 | 1,550.0 |
| Operating expenses | -1,491.9 | -1,017.1 | -1,213.3 | -1,245.6 | -1,270.0 |
| Operating Profit | 314.3 | 417.6 | 258.2 | 262.4 | 280.0 |
| Other Gains / (Losses) | -22.6 | -10.5 | 0.1 | 0.1 | 0.1 |
| Finance Costs | -42.3 | -54.1 | -52.4 | -51.6 | -50.7 |
| Pre-tax Profit | 249.4 | 353.0 | 205.9 | 210.9 | 229.4 |
| Income Tax | -81.2 | -74.2 | -70.0 | -71.7 | -78.0 |
| Effective Tax Rate (%) | 32.6 | 21.0 | 34.0 | 34.0 | 34.0 |
| Minorities | -18.7 | -23.0 | -23.0 | -23.0 | -22.0 |
| Net Profit | 146.9 | 240.2 | 112.9 | 116.2 | 130.4 |
| Growth | |||||
| Revenue (%) | -1% | -21% | -17% | 2% | 3% |
| Gross Profit (%) | 0% | 33% | -5% | 2% | 7% |
| Net Profit | 7% | 64% | -7% | 3% | 12% |
| BALANCE SHEET DATA (FYE December, RM m) | 2023A | 2024A | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| Property, Plant and Equipment | 406.0 | 406.0 | 273.7 | 419.8 | 434.0 |
| Cash and Cash Equivalents | 707.7 | 707.7 | 567.5 | 659.5 | 674.0 |
| Trade Receivables | 455.4 | 452.4 | 510.7 | 515.8 | 521.0 |
| Other Assets (incl. intangibles) | 2,706.1 | 2,778.0 | 3,168.5 | 3,023.5 | 3,107.2 |
| Total Assets | 4,275.2 | 4,344.1 | 4,520.5 | 4,618.6 | 4,736.2 |
| Payables | 1,593.1 | 1,640.7 | 1,224.1 | 1,382.6 | 1,422.9 |
| Loan and Borrowings | 768.2 | 768.2 | 957.7 | 941.4 | 925.2 |
| Deferred tax | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Other Liabilities | 67.9 | 19.6 | 71.1 | 35.6 | 36.6 |
| Total Liabilities | 2,429.2 | 2,429.5 | 2,254.9 | 2,361.6 | 2,386.7 |
| Shareholders’ Equity | 1,678.8 | 1,851.0 | 1,897.7 | 1,947.8 | 2,012.7 |
| Total Equity and Liabilities | 4,275.2 | 4,344.1 | 4,520.5 | 4,618.6 | 4,736.2 |
| PER SHARE DATA & RATIOS (FYE Dec) | 2023A | 2024A | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| Book Value Per Share (RM) | 1.09 | 1.20 | 1.23 | 1.26 | 1.30 |
| NTA Per Share (RM) | 1.02 | 1.13 | 1.16 | 1.20 | 1.27 |
| EPS (Sen) | 9.5 | 15.5 | 7.3 | 7.5 | 8.4 |
| DPS (Sen) | 2.0 | 2.0 | 2.0 | 2.0 | 2.0 |
| Payout Ratio (%) | 21.1 | 12.9 | 27.4 | 26.6 | 23.7 |
| ROA (%) | 3.4 | 5.5 | 2.5 | 2.5 | 2.8 |
| ROE (%) | 8.7 | 13.0 | 5.9 | 6.0 | 6.5 |
Source: Company, PublicInvest Research estimates
Tan Siang Hing
T 603 2268 3016
F 603 2268 3014
E tan.sianghing@publicinvestbank.com.my
RATING CLASSIFICATION
OUTPERFORM: The stock return is expected to exceed a relevant benchmark’s total of 10% or higher over the next 12months.
NEUTRAL: The stock return is expected to be within +/- 10% of a relevant benchmark’s return over the next 12 months.
UNDERPERFORM: The stock return is expected to be below a relevant benchmark’s return by -10% over the next 12 months.
TRADING BUY: The stock return is expected to exceed a relevant benchmark’s return by 5% or higher over the next 3 months but the underlying fundamentals are not strong enough to warrant an Outperform call.
TRADING SELL: The stock return is expected to be below a relevant benchmark’s return by -5% or more over the next 3 months.
NOT RATED: The stock is not within regular research coverage.
SECTOR
OVERWEIGHT: The sector is expected to outperform a relevant benchmark over the next 12 months.
NEUTRAL: The sector is expected to perform in line with a relevant benchmark over the next 12 months.
UNDERWEIGHT: The sector is expected to underperform a relevant benchmark over the next 12 months.
DISCLAIMER
This document has been prepared solely for information and private circulation only. It is for distribution under such circumstances as may be permitted by applicable law. The information contained herein is prepared from data and sources believed to be reliable at the time of issue of this document. The views/opinions expressed herein are subject to change without notice and solely reflects the personal views of the analyst(s) acting in his/her capacity as employee of Public Investment Bank Berhad (“PIVB”). PIVB does not make any guarantee, representations or warranty neither expressed or implied nor accepts any responsibility or liability as to its fairness liability adequacy, completeness or correctness of any such information and opinion contained herein. No reliance upon such statement or usage by the addressee/anyone shall give rise to any claim/liability for loss of damage against PIVB, Public Bank Berhad, its affiliates and related companies, directors, officers, connected persons/employees, associates or agents.
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