KUALA LUMPUR (Dec 3): Matrix Concepts Holdings Bhd rose as much as 2% despite concerns on the property developer's lower cash reserves and ability to sustain dividends.
According to Insider Asia, while these were crucial concerns for Matrix Concepts, another important point to note is the company's price-earnings ratio (PER) valuation, which is at a discount to the sector average.
Insider Asia wrote in a report that Matrix Concepts shares were traded at a trailing 12-month PER of 7.8 times. Bloomberg data showed that the average sector PER came to about 18 times.
Matrix Concepts rose as much as five sen to RM2.75 before reducing gains. At 2.54pm, the stock was traded at RM2.74 with 218,200 shares done.
For comparison, the FBM KLCI fell 21.68 points or 1.21%.
Insider Asia said Matrix Concepts' market capitalisation had nearly doubled to RM1.3 billion, partly due to its policy of "rewarding shareholders well".
According to Insider Asia, Matrix Concepts had paid dividends of 30.4 sen per share in financial year ended December 31, 2013 (FY13). The dividends translated into a 13.8% yield based on the company's initial public offering share price of RM2.20.
Looking ahead, Insider Asia is however mindful of Matrix Concepts ability to sustain its dividends. This is because Matrix Concepts' cash position has decreased.
According to Insider Asia, Matrix Concepts' net cash had fallen to about RM100,000 in 3QFY14 from RM191.9 million as at 3QFY13.
Insider Asia's report is published in The Edge Financial Daily and theedgemarkets.com today.