KUALA LUMPUR: Hong Leong Investment Bank is retaining its Buy call on Matrix Concepts with an unchanged target price of RM2.89. This is based on an unchanged 20% discount to realised net asset value (RNAV) of RM3.61.
HLIB Research said the company's 80% owned Matrix IBS Sdn Bhd is teaming up with Nissin Ex. Co. Ltd (12%) and Nihon House Corporation (8%) to set up a factory to produce prefabricated building materials using the industrialised building system (IBS) technology.
The factory will be at its Sendayan TechValley with a planned capex of RM30mil and is expected to be completed in 3QCY18. It will have a production capacity for 700 terrace houses per annum.
“We are positive on this development as Matrix stands to benefit from the transfer of IBS technology from both the reputable Japan counterparts, potential cost savings, better built quality and improve efficiency.
“We expect no immediate financial impact and utilisation of the prefabricated building materials is targeted on selected in-house housing development from 2HFY19 onwards. The JV does not rule out the possibility to supply to other housing developers in the longer term.
“Despite higher cost of IBS building materials, net margin should not be affected given potential savings from shorter construction period, material wastage reduction and tax incentive from the investment.
“Overall, outlook for Matrix remains favourable and is on track to achieve its RM1bn sales target. Current unbilled sales stand at historical high at 1.6 times over property development revenue,” it said.
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