Maybank IB Research expects Glomac’s FY2020 earnings to improve


Maybank Research said with new tenants - Samanea Malaysia, a subsidiary of Singapore-based Samanea Group, and Jaya Grocer - starting to pay rent after their rent free period ended, it expects operating losses from Glo Damansara shopping mall to narrow in FY4/20.

KUALA LUMPUR: GLOMAC BHD’s earnings for the financial year ending April 2020 is expected to improve on better leasing rates of 74% vs 45% in FY4/18 at Glo Damansara shopping mall, Maybank Investment Bank Research said.

The research house said on Thursday that elsewhere, Glomac’s recent launch of 121 Residences received overwhelming response, with 90% of the 445 units booked/sold.

“We maintain our forecasts and MYR0.44 TP, at a 75% discount to RNAV to factor in the present weak property market sentiment and its small market cap. Reiterate BUY with catalysts expected from stronger earnings/sales in FY20. Risks to our view include a prolonged slowdown in property sector, ” it said.

Maybank Research said with new tenants - Samanea Malaysia, a subsidiary of Singapore-based Samanea Group, and Jaya Grocer - starting to pay rent after their rent free period ended, it expects operating losses from Glo Damansara shopping mall to narrow in FY4/20.

Leasing was 74% as at end-July 2019, up from 45% in 2018. Samanea Malaysia occupies 180,000 sf or 100 shop units. It has rented out 50% of its shop lots to home-related retailers.

There was also an overwhelming response to the recent launch of Tower A of Glomac’s 121 Residences worth RM321mil in GDV was 90% booked/sold in a weekend. Its 445 apartments, with a similar concept as Plaza Kelana Jaya 4, were priced from RM325,000/unit for 450sf and RM540,000/unit for 750sf or RM720psf gross.

“We attribute the project’s success to its proximity to nearby Bandar Utama MRT station, One Utama Shopping Mall and the upcoming Kayu Ara station under KVLRT 3.

“With the success of Tower A, Glomac intends to launch the remaining 389 units at Tower B by end-September/early-October 2019.

“We keep our forecasts and RM1.76/share RNAV estimate for now. Management has a RM600mil (+86% YoY) sales target for FY20 vs our RM548mil forecast.

"This is premised on RM900mil worth of new projects, including: 1) Lakeside Residences’ Green Tec Central with its affordable apartments at RM269m GDV when launched by 4QFY20; and 2) 121 Residences, ” it said.


   

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