KUALA LUMPUR (Aug 12): Hong Leong Investment Bank (HLIB) Research expects Seremban-based property developer Matrix Concepts Holdings Bhd to be able to pay at least 10.5 sen per share dividend for the financial year ending March 31, 2021 (FY21), which translates to a yield of 6.2% — one of the highest in the property sector.

The Bandar Sri Sendayan township in Negeri Sembilan is still Matrix’s main earnings driver, said HLIB Research analyst Andrew Lim Ken-Wern in a note.

“Note that take-up for the recently-launched first phase of Laman Sendayan garnered a strong response (fully booked on [the] first day of launch).

“Bookings remain encouraging as over RM800 million was made from mid-March to end-July which was boosted by additional discounts provided during the Movement Control Order period,” said Lim.

He added that Matrix has set its FY21 sales target at RM1.1 billion, which is 6% up from FY20’s actual sales. Lim believes this goal is achievable, despite market conditions, due to the encouraging response to its products in recent months.

“Earnings visibility will continue to be supported by new sales and unbilled sales of 0.8x [times] cover (RM1 billion).   

“Furthermore, Matrix’s healthy balance sheet of 0.07x net gearing as of FY20 will provide the buffer to sustain through this challenging environment,” he said.

Lim maintained his ‘buy’ call on the group with an unchanged target price of RM2.06 based on a 30% discount to realisable net asset value (RNAV) of RM2.94.

“We continue to like Matrix as it is well-positioned to ride on affordable housing themes within its successful townships with cheap land cost and sustained property sales. This is supported by an attractive dividend yield of 6.2% for FY21 and 7.4% for FY22, being one of the highest in the sector,” he noted.

In addition, Matrix also plans to operate construction works at 115% capacity by working overtime to catch up on its schedule by year-end, said Lim.

“We remain positive on management’s efforts as we note that the past two months were on track whereby construction works have been going at 120%,” he added.

At the time of writing, shares in Matrix were one sen or 0.59% lower at RM1.68, bringing the market value to RM1.41 billion. It saw some 107,400 shares transacted.