SKYWLD’s 4QFY25 CNP came in at RM14.5m (-11.6% yoy, +18.9% qoq), bringing 12MFY25 CNP to RM46.8m (-58.3% yoy). The results exceeded expectations, accounting for 101.3% of our full-year forecast and 102.3% of consensus estimate. Key deviation was primarily driven by higher-than-expected revenue recognised from greater progress on ongoing projects and lower-than-expected costs from the recently completed projects.
However, we revise our earnings forecast downward by -0.2%/-4.4% to RM51.4m/RM57.9m for FY26F/FY27F, respectively to reflect the absence of revenue from completed projects in FY25 and our expectation that earnings may remain subdued in the near term, given the time lag between project launches and meaningful profit recognition.
Maintain our HOLD recommendation with a lower target price of RM0.47 (from RM0.49), based on 30% discount to our revised RNAV valuation and appraised with a three-star ESG rating.
Results above expectations. Excluding the reversal of provision for ex-gratia (RM-1.5m) and other adjustments (-RM6.1m), 4QFY25 core net profit (CNP) came in at RM14.5m, bringing 12MFY25 CNP to RM46.8m (-58.3% yoy). The result was above expectations, accounting for 101.3% of our forecast of RM46.2m and 102.3% of consensus estimate of RM45.8m. Key deviation was primarily driven by higher-than-expected revenue recognised from greater progress on ongoing projects and lower-than-expected cost from the recently completed EdgeWood and SkyVogue Residences.
YoY. 4QFY25 slid 11.6% yoy to RM14.5m, dragged by the sharp decline in revenue. The revenue decline stemmed from reduced recognition from EdgeWood Residences and SkyVogue Residences, which were completed in 4QFY25, and the absence of contribution from SkyAwani V Residences, completed in FY24.
QoQ. CNP advanced by 18.9% qoq to RM14.5m, driven by higher revenue (+6.1%) and margin expansion from cost savings. The increased revenue was supported by higher recognition from EdgeWood, SkyVogue, and Vesta Residences. Additionally, cost savings were realised from the completion of EdgeWood and SkyVogue Residences during the quarter.
Outlook. Unbilled sales fell to RM461.2m (from RM622.6m in 3QFY25) due to project completions. The pipeline is expected to be replenished through a series of upcoming launches. Longer-term prospects are supported by the RM13.0bn affordable housing projects in Penang, scheduled for launch in CY2026. The Group is also making its first foray into the luxury segmentvia the upcoming Mont Kiara development, with an estimated GDV of RM800–900m targeted for launch in CY2027. Given the limited land availability in Mont Kiara, this represents an opportunity to tap into a high-end, supply-constrained market. With a net gearing of 11.3% as at the end-FY25, the Group retains ample capacity for further landbanking activities. However, we remain cautious as project launches may not translate into immediate or significant earnings uplift in the near term and the mid-range residential segment remains competitive and sales may take longer to materialise for the ongoing projects (Curvo Residences and Vesta Residences) due to ample supply in the market.
Earnings Revision. We lowered our earnings forecast by -0.2%/-4.4% to RM51.4m/RM57.9m for FY26F/FY27F, respectively, to reflect the absence of revenue from completed projects in FY25 and subdued earnings from future launches.
Valuation. We maintain our HOLD recommendation on SKYWLD with a lower target price of RM0.47 (from RM0.49), based on a 30% discount to our revised RNAV valuation and appraised with a three-star ESG rating.
Risks. Land scarcity, potential construction cost increases, and regulatory changes.
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Currency | Buy Rates (RM) | Sell Rates (RM) |
---|---|---|
USD | 4.212042 | 4.248408 |
EUR | 4.921000 | 4.929487 |
CNY | 0.591903 | 0.592919 |
HKD | 0.540309 | 0.544492 |
SGD | 3.268153 | 3.293573 |