KUALA LUMPUR (Nov 19): JF Apex Securities Research has downgraded Tambun Indah Land Bhd (TILB) to a Hold (from Buy) with a lower target price of RM2.14 (from RM2.55) after excluding the GDV contributions from the cancellation of 209.5 acres of land deal in Seberang Perai which was announced last week.

In a note Wednesday, the research house nevertheless said TILB would actively replenish its landbank in near future particularly in hotspots such as Klang Valley and Penang.

“Our revised target price implies 2015F PE of 7.3x (based on diluted EPS of 29 sen/share),” it said.

JF Apex Research said TILB had recorded RM25.5 million net profit (+48.3% y-o-y and +0.4% q-o-q) for its 3Q14 results.

“Similarly, the group clinched RM116.8 million revenue, which was up 20.3% y-o-y but down 8.8% q-o-q,” it said.

The research house said the earnings were within expectations.

It said that cumulatively, TILB achieved RM76.2m for its 9M14 net profit which account for 79% of our full-year forecast and 78% of consensus estimates.

JF Apex Research said despite TILB recording new sales of RM81 million in this quarter which was lower than RM151 million achieved in 2Q14 and RM125 million in 1Q14, we reckon that the Group is still on track to meet its target new sales of RM500 million this year with 9M14 sales of RM357 million thus far account for 71% of the Group’s target and house forecast for this year.

“Meanwhile, its unbilled sales of RM457 million as of 3Q14 shall provide the group’s earnings visibility for the next 1 year,” it said.