KUALA LUMPUR (Dec 4): Hong Leong IB Research (HLIB) has maintained its “Hold” rating on Glomac Bhd with an unchanged target price of RM1.11 and said Glomac’s reported 1HFY15 PATAMI of RM34.0 million came in below expectations from lesser-than-expected property launches and higher-than-expected effective tax rate.

In a note Thursday, the research house said the 39.4% year-on-year decline in revenue was due to the absence of significant property launches, completion of Glomac Damansara and tail-end projects in Bandar Saujana Utama.

HLIB said the decline in 1HFY15’s profit before tax was not as severe, thanks to costs savings from the completion of high-costs projects and ongoing high-margins developments.

It said sales remained modest at RM62 million as at 1HFY14. Glomac’s launches will resume in 2HFY15 with potential GDV of at least RM602 million.

“The group is confident that its sales momentum will pick up in 2HFY15 to match at least FY14’s total sales of RM504 million with optimistic take-ups (70-80%) given that almost 70% of its launches would be landed developments.

“Target price remained unchanged at RM1.11 based on unchanged 40% discount to RNAV or implied FY15 P/E of 8.3x. Maintain “Hold” on the stock,” it said.