PETALING JAYA: Property-based Glomac Bhd’s sales are expected to pick up in the coming quarters with RM403mil worth of new launches and RM123mil (at cost) inventories.
However, Maybank IB Research said Glomac has not guided on its financial year (FY) 2021 sales goal.
Unbilled sales were RM660mil at end-July 2020.
It has maintained its FY21-23 earnings forecasts and sales assumption of RM420mil for FY21 (+9% year-on-year, for now).
However, TA Securities adds that after taking into account the slower work progress in the 1QFY21 and lower property sales assumptions, it has reduced Glomac’s FY 21/22/23 earnings by 18%/2%/5% respectively.
“In view of the reduction in planned launches, we cut our FY21/22/23 new property sales assumptions by RM50mil per annum to RM370mil/ RM400mil/RM450mil respectively, ’’ TA said.
TA Securities maintains a “buy’’ call on the stock with an unchanged target price of 36 sen a share.
Maybank has a “sell’’ call with a target price of 23 sen.
“We like Glomac’s strategy, which focuses on affordable landed residential segments, solid unbilled sales of RM660mil to anchor near-term earnings, as well as its healthy balance sheet (0.28x net gearing with RM171mil cash and bank balances) to ride through this challenging period.
Both houses are concerned over Glomac’s ability to secure new tenants at Glo Damansara Mall in view of rising competition from the surrounding suburban malls.
“We understand that Samanea Group (its key tenant taking 40% of total net lending area) has not renewed its lease agreement after the lease agreement ended in September, ’’ Maybank said.
The company reported net profit of RM2.8mil for first quarter FY21.
Revenue for the quarter declined 10% y-o-y to RM46.9mil, due largely to the MCO which halted construction work.
However, Glomac’s 1QFY21 property sales doubled to RM50mil on a y-o-y basis, driven by sustained demand for residential products at Saujana Perdana in Sungai Buloh and 121 Residences in PJ-Damansara.
TA said the group’s latest unbilled sales inched slightly to RM660mil from RM650mil a quarter ago.
This provides the group with more than two years’ earnings visibility (about 3x FY20 property development revenue).
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