Stock With Momentum: Tambun Indah Land

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This article first appeared in The Edge Financial Daily, on March 21, 2016.

 

Tambun Indah Land Bhd (-ve)

SHARES of property developer Tambun Indah Land Bhd (fundamental: 2.7/3; valuation: 1.8/3) rose as much as 4.89% to an intraday high of RM1.50 on Friday, and triggered our momentum algorithm for the first time. The stock later pared some gains to close at RM1.49, up 4.2%, valuing it at RM632.45 million.

Some 2.1 million shares were traded, compared to its 200-day average volume of 351,826.5.

The Penang-based property developer’s revenue for the fourth quarter ended Dec 31, 2015 (4QFY15) fell 17.29% year-on-year to RM91.05 million, mainly due to lower revenue from its property development and property management segment. Revenue for the quarter was mainly contributed by Straits Garden in Penang Island and Rain Tree Park 1 in Pearl City.

Its other ongoing projects are Camellia Park in Butterworth; BM Residence, Permai Residence and Residensi Bukit Kecil in Bukit Mertajam; and Pearl Residence, Pearl Harmoni, Pearl Avenue 2 and Raintree Park 2 in Pearl City, Simpang Ampat.

Net profit for the quarter, however, grew 17.27% to RM30.35 million, compared to RM25.88 million last year, thanks to higher profit margin from on-going projects and a fair value gain on investment properties amounting to RM6.67 million.

As at Dec 31 last year, Tambun Indah achieved an average take-up rate of 81.7% for its ongoing projects, with a total gross development value of RM1.43 billion; and unbilled sales of approximately RM324.2 million. It said these should contribute positively to the group’s earnings for the next two to three years.

For the full FY15, its revenue declined 21.24% to RM367.65 million, from RM466.84 a year ago.Its net profit fell 1% to RM101.12 million from RM102.14 million.

Launches Tambun Indah has planned for 2016 include Avenue Garden, Pearl Tropika, Pearl 28 and Pearl Saujana 1 in Pearl City, Simpang Ampat. It expects to achieve satisfactory performance in FY16. Its share price is 7.38% higher compared to the end of last year. It is currently trading at a trailing P/E of 6.23 times.

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