Matrix Concepts Holdings Berhad - Still resilient
Wed, 27-Nov-2024 07:45 am
by Research Team • Apex Research

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MATRIX (5236)

Target Price (RM)

2.07

Recommendation

Hold

Summary

  • MATRIX’s 2QFY25 core net profit at RM55.9m (-12.7% yoy, -7.9% qoq), bringing 6MFY25 core net profit at RM116.6m (-9.4% yoy) came within expectations, accounting to 47.4% and 45.1% of ours and consensus full-year forecast respectively.

  • Earnings sustainability will be supported by progressive recognition of unbilled sales (RM1.32bn) along with total landbank of 3,311-ac that carries a total GDV of RM15.8bn to be develop over the next 10-15 years.

  • Downgrade our recommendation of HOLD on MATRIX with an unchanged target price of RM2.07 (based discount rate of 20% to our RNAV), as steep share price appreciation in recent months has reflected its fundamentals prospects. 

     

Results Review

  • Results review. 2QFY25 core net profit (CNP) stood at RM55.9m (-12.7% yoy, -7.9% qoq), after accounting for an adjustment of disposal gain amounting to RM11.5m. Revenue for the quarter declined -10.7% yoy to RM321.0m on slowdown in recognition of flagship Sendayan Developments.

     

  • Results within expectations. Reported CNP in 6MFY25 at RM116.6m (-9.4% yoy) came within expectations, making up to 47.4% of our CNP forecast of RM245.8m and was at 45.1% of consensus forecasted CNP of RM258.4m.

     

  • Operations Highlights. Unbilled sales stood at RM1.32bn as at end-2QFY25 will sustain revenue visibility over the next 18 months. We gather that MATRIX launched a total of RM618.5m worth of GDV in 1HFY25 which is on track to meet internal target of RM1.8bn in FY25. Average take-up rate remains relatively healthy at 84.5% with new property sales amounted to RM663.0m.

     

  • Industry Highlights. We believe that supportive measures under Budget 2025 such as first home buyers eligible for tax relief up RM5,000 for residential properties priced between RM500,000 to RM750,000 for transactions completed between 1 Jan 2025 to 31 Dec 2027; which falls within MATRIX’s portfolio will encourage sustained healthy take-up rates over the foreseeable future.

     

  • Outlook. Going into 2HFY25, MATRIX will be launching several projects mainly in Sendayan Developments with a collective GDV of RM1.16bn. Over the longer-term, MATRIX is equipped with a total landbank of 3,311-ac that carries a total GDV of RM15.8bn will sustain operations over the next 10-15 years.

     

  • Valuation. No changes to our earnings forecast. Following the steep share price appreciation (+21.1%) since our last report, we downgrade our recommendation on MATRIX to HOLD with an unchanged target price of RM2.07, based discount rate of 20% to our RNAV. At current juncture, we believe fundamentals and growth prospects has mostly priced into their current share price. 

     

  • Risk. Inability to replenish landbank, rising construction cost beyond expectations, changes in housing as well as property regulations and labour shortages.

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