KUALA LUMPUR: Kenanga Investment Research has pegged Main Market-bound Matrix Concepts' fair value at RM2.75, which is 55 sen above the offer price of RM2.20.
It had on Friday recommended investors subscribe for the shares of the Seremban-based property developer which has a market capitalisation of RM660mil.
Matrix Concepts owns 2,355 acres or a total gross development value (GDV) of RM6.5bil which provides visibility of up to 2019.
Kenanga Research said the major driver, Bandar Sri Sendayan, Seremban is a beneficiary of increasing demand for affordable homes in the Greater Klang Valley.
It said Bandar Sri Sendayan also has economic growth angles given its Sendayan Tech Valley (STV) which attracts a range of FDIs in the light-to-medium industrial space.
“The stock offers attractive FY13-14E dividend yields of 8.1%-9.0% based on its dividend policy of 40% payout of profit after tax. We peg Matrix's fair value at RM2.75 based on a conservative 40% discount to our discounted cashflow-driven FD realised net asset value (RNAV) of RM4.56,” it said.
The research house forecast FY13-14E net profit growth of 30% on-year and 10% on-year, underpinned by FY13-14E new launches of RM900mil to RM1bil and average take-up rates of 70% each.
“Current unbilled sales stand at RM445mil providing close to one year visibility. At IPO price, it will trade at FY13-14 estimates price-to-earnings ratio (PER) of 4.9 times to 4.5 times versus mid-cap developers average of 7.2 times to 5.9 times, while implied dividend yield of 8.1%-9.0% is richer than its peer average of 4.8%,” said Kenanga Research.
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