Maybank Research's top pick is Sime Darby Property as it has an advantage over many developers.
KUALA LUMPUR: Sime Darby Property
is confident of meeting its RM2.3bil sales target for 2019, underpinned by stronger property sales in the second quarter due to the official launch of the Home Ownership Campaign in March, Maybank Investment Bank Research said.
It said on Friday the positive outlook was also reinforced by its own marketing campaigns – PRIMETIME 8 and PoP Raya 2019.
“Given the decent take-up of 77% (average) on its recent new launches, Sime Property is confident of achieving its RM2.3b sales target for 2019. It has locked in RM403mil in property sales in 1Q19 (+57% YoY),” it said.
Sime Property is looking to launch phase one of Malaysia Vision Valley (MVV) 2.0 in 2020. Phase 1 will focus on the development of a high-tech and industrial park.
Thus far, master concept plan for MVV is completed and the company is now working on the master layout plan.
“No further details (GDV, margin) were given but part of the land could be sold or developed via a joint venture. This should help Sime Property to fund the capex requirement of MVV.
“Potential surprises could come from the revival of the KL-SG High Speed Rail project which could benefit its MVV and Pagoh projects,” it said.
Maybank Research also pointed out Sime Property had entered into a sales and purchase agreement with ZheJiang XSD Holding Group Co. to sell 300 acres of land in Kedah for RM90mil, to be completed by 2Q19.
“Our financial model has imputed RM100mil land sale for 2019. We lower our FY19/20/21 net profit forecasts by -30%/-20%/-9% to factor in: 1) lower project margin assumptions; and 2) higher selling & marketing costs.
“Our RNAV estimate is consequently lowered to RM2.63 a share (-12 sen). We lower our net profit forecasts by 9%-30%. Our RNAV-TP is lowered to RM1.18 (- 6sen) on an unchanged 0.45x times P/RNAV peg. Buy,” it said.
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