Lagenda Properties Bhd - Looking forward towards FY25
Wed, 26-Feb-2025 07:33 am
by Team Coverage • Apex Research

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LAGENDA (7179)

Target Price (RM)

1.490

Recommendation

Buy

Summary

  • LAGENDA’s 4QFY24 core net profit fell -18.1% yoy and -35.8% qoq to RM30.3m (after exclude RM15.9m of other income arising from investment in Northern Solar Holdings Bhd), bringing FY24 core net profit at RM168.7m (+13.7% yoy), which fell short of expectations, accounted to 77.8%/83.4% of ours/consensus expectations respectively.

  • Future earnings growth will be backed by improved unbilled sales amounting to RM896.3m alongside with sizeable landbank of >5,000-ac with total GDV of RM13.0bn.

  • Trimmed our earnings forecast by -11.4%/-4.5% to RM215.5m/RM257.2m for FY25F/FY26F to account for slower-than-expected construction progress in certain newly launched projects and higher-than-expected finance cost.

  • Re-iterate our BUY recommendation with a lower target price of RM1.49, based on 30% discount to RNAV and ascribed with three-star ESG rating.

 

Results fell short of expectations. FY24 core net profit at RM168.7m (+13.7% yoy) came below expectations, accounting to 77.8% of our core net profit forecast at RM217.0m and was at 83.4% of consensus forecasted net profit of RM202.3m.

 

YoY. After excluding RM15.9m of other income from the investment in Northern Solar Holdings Bhd that made its debut on Bursa Malaysia earlier this month, core net profit fell -18.1% yoy to RM30.3m. Revenue for the quarter, declined marginally by -2.4% yoy to RM233.9m. 

 

QoQ. Core net profit slipped -35.8% qoq to RM30.3m, after removing gains arising from investment of Northern Solar Holdings Bhd as well as certain newly launched projects are at initial stage of construction. Revenue for the quarter contracted -17.5% qoq to RM233.9m.

 

Outlook. Incorporating RM265.6m of new sales in 4QFY24. LAGENDA delivered a record-breaking annual sales of RM1.13bn (+9% yoy) in FY24 and is targeting RM1.4bn of new sales in FY25F. The Group is equipped with balance landbank of 5,036-ac that carries a potential GDV of RM13.0bn to sustain developments over the next 8-10 years. Unbilled sales rose to RM896.3m (from RM835.2m in 3QFY24) alongside with bookings of RM473.4m (RM306.5m in 3QFY24) as at end-FY24 will sustain revenue visibility for the next 12-18 months.

 

Earnings Revision. Trimmed our CNP forecast by -11.4%/-4.5% to RM215.5m/RM257.2m in FY25F/FY26F to account for slower-than-expected construction progress in certain newly launched projects and higher-than-expected finance cost.

 

Valuation. Re-iterate our BUY recommendation with a lower target price of RM1.49, based on 30% discount rate to RNAV and 0% ESG factored premium/discount based on three-star ESG rating.

 

Risk. Inability to replenish landbank, rising construction costs beyond expectations, and changes in housing as well as property regulations.

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