MATRIX’s 4QFY25 CNP came in at RM31.1m (-33.8% yoy, -28.1% qoq), bringing 12MFY25 CNP to RM202.6m (-13.3% yoy). The results exceeded our expectations but came in below consensus expectations, accounting for 106.2% of our full-year forecast and 93.9% of consensus estimate. The earnings beat was primarily driven by higher-than-expected revenue recognised from ongoing projects.
The group declared a fourth interim dividend of 1.35 sen for 4QFY25.
We raise our earnings forecast by 6.1%/3.0% to RM243.2/RM262.7 for FY26F/FY27F respectively to reflect stronger contributions from previously delayed revenue recognition, and greater take up rate from ongoing as well as upcoming project launches.
Upgrade to BUY recommendation with a higher target price of RM1.53 (from RM1.35) based on 30% discount to our revised RNAV valuation and appraised with a three-star ESG rating.
Results above expectations. Excluding the gain of disposal of property, plant, and equipment and investment property (-RM11.5m), 4QFY25 core net profit (CNP) came in at RM31.1m, bringing the 12MFY25 total to RM202.6m (-13.0% yoy). This result was above our expectations, accounting for 106.2% of our full-year forecast of RM190.7m but came in below the consensus estimate, representing 93.9% of the consensus estimate of RM215.6m. The earnings beat was primarily driven by higher-than-expected revenue recognised from ongoing projects.
Dividend declared. The Group declared a fourth interim dividend of 1.35 sen for 4QFY25 (4QFY24: 2.50 sen), bringing the FY25 DPS to 7.95 sen (FY24: 10.0 sen).
YoY. 4QFY25 CNP slid 36.7% yoy to RM31.1m, dragged by decline in revenue (-13.6% yoy). The weaker topline was primarily due to lower revenue recognition from the property development segment, particularly in Sendayan, the Group’s key revenue contributor. Earnings were further impacted by higher administrative and general expenses. Additionally, finance costs surged to RM2.9m (from RM0.1m) as a result of increased borrowings to support the Group’s ongoing development expansion.
QoQ. CNP slid 28.1% qoq, despite seeing increase in revenue (8.6% qoq), primarily attributed to increased administrative and general expenses.
YTD. 12MFY25 CNP declined (13.8% yoy), dragged by an 11.7% decrease in revenue. The decline was primarily due to a 15.4% yoy reduction in contributions from Sendayan Developments, affected by the timing of project launches and revenue recognition. The impact was partially mitigated by a strong 58.5% yoy growth in other business segments, led by the education and healthcare divisions. The decline in CNP was further pressured by higher selling, marketing, and administrative expenses.
Outlook. Matrix's unbilled sales increased to RM1.46bn at the end of FY25 (from RM1.18bn at end-FY24), supported by several launches during FY25. A substantial portion(c.RM1.0bn) was contributed by the Group’s flagship township, Bandar Sri Sendayan (BSS), in Negeri Sembilan. The unbilled sales are expected to be recognised progressively over the next 15-18 months, providing earnings visibility and a degree of buffer for the Group. Earnings sustainability is further supported by the maiden launch within the Malaysia Vision Valley (MVV) development. The MVV landbank, to be developed over 12 years, carries a total GDV of RM12bn. The first phase will focus on industrial products, with residential phases to follow. The Group is also in the process of completing the Sale and Purchase Agreement (SPA) for a second 1,000-ac. MVV parcel, which is targeted for completion in 2HFY26. Our recent site visit to Negeri Sembilan revealed encouraging take-up for industrial developments. As Matrix primarily focuses on landed properties in Negeri Sembilan, the Group is well-positioned to capture spillover demand from the Klang Valley. In parallel, the Group continues to expand its healthcare segment, including increasing its bed capacity. Mawar Medical Centre currently generates over RM100m in annual revenue, and we anticipate stronger earnings contributions from the healthcare division moving forward. The Group has earmarked RM1.7bn worth of new property launches in FY26.
Earnings Revision. We raised our earnings forecast by 6.1%/3.0% to RM243.2m/RM262.7m for FY26F/FY27F, respectively to reflect stronger contributions from previously delayed revenue recognition, and greater take up rate from ongoing as well as upcoming project launches.
Valuation. Post earnings adjustment, we upgraded our recommendation on MATRIX to BUY from HOLD, with a higher target price of RM1.53 (from RM1.35), based on a 30% discount to our revised RNAV valuation and appraised with a three-star ESG rating.
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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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 |