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AME: Strong Sales Momentum and Strategic Land Acquisitions Drive Positive Outlook
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
An industrial property developer has demonstrated robust financial performance and strategic growth, recording RM110.5 million in new sales during the first quarter of FY26. This performance puts the company firmly on track to achieve its FY26 sales target of RM400 million, driven by significant transactions with multinational corporation (MNC) clients.
Performance Highlights
The strong sales momentum in 1QFY26 was underpinned by notable deals, including RM37 million from a Chinese optical products manufacturer and RM19 million from a Japanese medical packaging client, both within its i-TechValley development. The newly launched Northern TechValley also contributed RM25.8 million in new sales. To further enhance accessibility and support future sales, management has commenced the construction of a flyover bridge at Northern TechValley.
In the construction and engineering segment, the company secured RM169 million in new contracts in 1QFY26, significantly boosting its outstanding order book by 19% year-on-year to RM255.9 million.
Strategic Growth and Future Outlook
The company is actively strengthening its gross development value (GDV) pipeline, with the finalisation of a RM1.3 billion estimated GDV land acquisition in Ijok from KLK expected to complete in October 2025. This strategic move is anticipated to expand the company’s total GDV pipeline by a substantial 59% to RM3.5 billion.
A significant financial uplift is expected in 2QFY26, with the recognition of an RM85 million gain from the final payment received for the RM210 million DC Hyperspace land sale. Management is exploring the possibility of a special dividend resulting from this gain, which could offer an upside to the full-year FY26 dividend per share (DPS) forecast.
Looking ahead, the company is poised to capture additional demand, benefiting from the growing industrial property needs in key Foreign Direct Investment (FDI) hubs such as Johor and Penang. PhillipCapital maintains a BUY rating with an unchanged SOP-derived target price of RM2.00.
Key Challenges
While the outlook remains positive, potential uncertainties surrounding US tariffs could introduce a degree of risk, possibly dampening property demand.
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