KUALA LUMPUR: Kenanga Research said Amverton Bhd's Fy17 net profit of RM24.3mil made up 110% of its full-year estimate with property sales of RM102.9mil also higher compared to its target of RM97.8mil.
The research firm maintained outperform on the counter with an unchanged sum-of-parts-driven target price of RM2.
"Although our TP implies a high FY18E PER of 28.4x vs. other small-mid cap developers’ average of 8.5x, its GDV/market cap ratio is also high at 26.6x vs. small-mid cap peers’
average of 12.4x.
"We still like the company for its healthy margins, light balance sheet, earnings growth, and future catalyst, i.e. Pulau Carey that is set to ride on the potential port development project undertaken by SIME and MMC."
FUll-year net profit grew 21% from the previous year with revenue growth of 39%, driven by the property division, which registered revenue growth of 81% as the Amverton Links project in Klang saw healthy response from the market.
"We are positive with its earnings outlook in FY18 backed by its unbilled sales of RM56m coupled with its continuous efforts in marketing higher-end products in Amverton Hills (GDV: c.RM105.0m) which they have launched last year, coupled with the potential launch of its service apartment (GDV: RM88.0m) in Pulau Carey this year. Hence, we believe that our FY18E sales target of RM111.6m is achievable," said the research firm.
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