Friday 29 Mar 2024
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KUALA LUMPUR (Aug 27): Tambun Indah Land Bhd shares slipped 4.89% on the back of its lacklustre second quarter ended June 30, 2015 (2QFY15) results which were below expectations.

At 10.59am, the stock shed 7 sen to settle at RM1.36. A total of 1.86 million shares were traded.

In a filing with Bursa Malaysia yesterday, property developer Tambun Indah (fundamental: 3; valuation: 2.4) saw its net profit decrease 32.7% year-on-year (y-o-y) to RM17.1 million in 2QFY15 from RM25.4 million in 2QFY14 as most of the company’s projects in 2QFY15 were nearing completion and handover.

The company had also only launched two projects at the end of 2014 which are at early stage of construction.

Revenue in 2QFY15 dipped 53.1% to RM60.01 million compared to RM127.96 million.

In the first half of financial year 2015 (1HFY15), the company also posted a 7.3% decrease in net profit to RM47 million from RM50.7 million in the previous corresponding period while revenue decreased 20.65% to RM190.42 million compared to RM239.98 million in 1HFY14.

In a note today, BIMB Securities said Tambun Indah’s 2QFY15 results were below expectation due to weaker sales, with its 1HFY15 results meeting 43% and 40% of the research firm’s and concensus’ earnings forecasts respectively.

Despite that, the research firm noted that in 1H15 the group recorded strong take up rate averaging 90% for its ongoing projects, with a total gross development value (GDV) of RM1.2 billion and unbilled sales of RM408 billion, which will provide earnings visibility for at least the next three years.

BIMB Securities upgraded its call on the stock to "buy" from "hold" with a target price of RM1.78, as the share price has reverted to an attractive entry level.

In a note today, JF Apex Research said that the developer's new product launches in Pearl City, Simpang Ampat nearby Batu Kawan, with an estimated GDV of RM527 million, will be able to command decent sales and better margins.

JF Apex also said Pearl City’s GDV could increase on launches of the township’s remaining phases.

Despite the company’s sound fundamentals, JF Apex said sentiment towards property stocks remains weak.

“Whilst we are positive on the stock for its long-term outlook with its key focus on affordable housing in mainland Penang, we see no immediate catalyst to drive its share price at this moment,” it said.

The research firm has maintained its “hold” rating on the stock with a lower target price of RM1.51 from RM1.82 previously, after applying a bigger discount to its revised fully diluted revalued net asset value (FD RNAV) of 35% from 15% previously.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

 

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