PETALING JAYA: Genting Plantations Bhd
, through its property division, has plans to launch about RM480mil in new property in 2024, according to Maybank Investment Bank (Maybank IB) Research.
Part of these launches are brought forward from 2023, namely the industrial launches at Batu Pahat worth about RM230mil.
According to the research firm, Genting Plantations also plans to launch about RM250mil worth of projects, mainly residential, in Genting Indahpura, Kulai.
These are some of the takeaways from a meeting Maybank IB Research had with Genting Plantations, which focused on its property division.
The plantation group, which is 55.4% owned by Genting Bhd, started township development in 1993.
While Genting Plantations’ property division has growing prospects, Maybank IB Research said “earnings delivery will take time as it has no immediate plans for land disposal unless potential buyers can further enhance the value of its existing townships”.
“We downgrade Genting Plantations to ‘hold’ given limited upside to our new target price of RM6.33 after rolling forward valuation to financial year 2024 (FY24) on an unchanged 19 times price-to-earnings ratio,” said the research firm.
It noted that the property division contributes RM56mil in profit before interest and taxes (PBIT) or 17% of group profitability for the nine-month period of 2023.
“At its peak in 2014, the property division contributed RM155mil in PBIT or 31% of group PBIT.
“For now, its estimated FY24-FY25 earnings growth should emanate from property launches and sales at its two active township developments in Kulai (which is its flagship township) and Batu Pahat, and a new premium outlet in Jakarta scheduled to open in the first quarter of 2025,” it said.
The research firm said future development potential lie in three other projects.
These are plans to develop its nine-acre land in Segambut (which it acquired in 2016 for RM66mil) and its 1,067-acre land in Sepang.
The other is a 23-acre land in Sentul City, Jakarta, which it acquired in 2021 for RM127mil. These areas have the potential to be the next earnings growth catalyst for the group, said Maybank IB Research.
However it added that Genting Plantations did not commit on a timeline for these plans.
