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This article first appeared in The Edge Financial Daily on January 23, 2020

Titijaya Land Bhd
(Jan 22, 29 sen)
Maintain hold with a higher fair value (FV) of 32 sen:
We maintain our “hold” recommendation on Titijaya Land Bhd with a higher FV of 32 sen from 28 sen based on a 50% discount to its revalued net asset value of RM784.5 million.

Our upgrade in valuation is to reflect the timing of future projects’ recognition following the guidance by the management. We make no changes to our net earnings forecasts for the financial year ending June 30, 2020 (FY20) to FY22.

We recently met up with Titijaya for updates on the company’s plan for 2020 and beyond. Titijaya maintained its new sales target of RM400 million for FY20. At present, the company has several ongoing projects, namely: Phase 1 of 3rdNvenue @ Embassy Row, Kuala Lumpur (service suites; gross development value [GDV] of RM577 million); The Shore @ Kota Kinabalu, Sabah (a mixed development; GDV of RM534 million); Riveria City @ Kuala Lumpur Sentral (an integrated development; GDV of RM373 million); and Park Residency @ Cheras (landed residential; GDV of RM80 million).

Titijaya launched Seiring Residensi in August 2019, which is phase one of its Damaisuria township project. Consisting of four towers, Seiring Residensi offers units of sizes ranging from 668 sq ft to 972 sq ft, with up to four bedrooms. Developed over four phases, Damaisuria will have a total GDV of RM1.59 billion, while the first-phase Seiring Residensi will have a GDV of RM677 million. The company also plans to launch Phase 3B of Taman Seri Residensi, Klang (landed semi-detached; GDV of RM38 million) by the second half of FY20.

For future development, Titijaya has a remaining land bank of 155 acres (62.73ha) with a combined GDV of about RM9.4 billion, located mainly in the Klang Valley. The projects planned for the remaining land bank are: Emporia @ Glenmarie (a mixed development; GDV of RM1.51 billion); Klang Sentral (serviced apartments; GDV of RM700 million); Damai Suria (a township; GDV of RM1.48 billion); Odeon @ Jalan Tuanku Abdul Rahman (serviced apartments and a retail mall; GDV of RM1.17 billion); Phases 3 and 4 of 3rdNvenue and retail (high-rise mixed; GDV of RM997 million); Phases 3A and 4 of Taman Seri Residensi and Selangorku (landed residential; GDV of RM161 million); Phases 2 and 3 of Riveria City @ Kuala Lumpur Sentral and retail (an integrated development; GDV of RM1.1 billion); and Areca @ Batu Maung, Penang (a mixed development; GDV of RM2.52 billion).

The management said several ongoing projects had progressed beyond their initial stage of construction, so the coming quarters should see a stronger performance. — AmInvestment Bank, Jan 22

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