Matrix Concepts Holdings Bhd - Earnings Track Expectations
Fri, 22-Aug-2025 07:57 am
by Team Coverage • Apex Research

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MATRIX (5236)

Target Price (RM)

1.72

Recommendation

Buy

  • MATRIX’s 1QFY26 CNP of RM62.9m (+3.7% YoY, +47.5% QoQ) came in within expectations, accounting for 25.4% of our full-year forecast and 24.7% of consensus projections.

  • The Group declared a first interim dividend of 1.75 sen for 1QFY26 (1QFY25: 2.50 sen).

  • Outlook remains positive, supported by (i) unbilled sales of RM1.5bn as at 30 June 2025, providing clear earnings visibility over the next 15–18 months; (ii) estimated GDV from the MVV 2.0 land of RM15bn, expected to be recognised over a 12-year period starting from FY26F; and (iii) new projects from the acquisition of Horizon L&L Sdn Bhd, adding incremental GDV (RM388.0m) and strategic expansion opportunities.

  • We increase our earnings forecasts by 1.9%/2.3% to RM252.0/RM268.9m for FY26F and FY27F, and roll forward FY28F to RM321.1m.

  • We reiterate our BUY recommendation with a higher target price of RM1.72 (from RM1.53), reflecting the annual audited numbers for FY25, recognition of newly acquired assets, and our revamped financial model which now incorporates the monetisation of landbanks poised for future development, applying a 30% discount to our revised RNAV and supported by a three-star ESG rating.

 

Results within expectations. 1QFY26 CNP of RM62.9m (+3.7% YoY, +47.5% QoQ) came in within expectations, accounting for 25.4% of our full-year forecast and 24.7% of consensus projections. No exceptional items were recorded during the quarter.

 

Dividend declared. The group declared a first interim dividend of 1.75 sen for 1QFY26 (1QFY25: 2.50 sen). 

 

YoY. 1QFY26 CNP increased 3.7% to RM62.9m, supported by a 51.9% reduction in selling and marketing expenses and a lower effective tax rate. The increase was also supported by a 1.6% rise in revenue, primarily driven by the property development segment which grew 1.8%, led by contributions from Sendayan Developments and Levia Residence. Revenue from education was up 25.9%, partly offsetting declines in healthcare and hospitality of 25.2% and 5.1%, respectively.

 

QoQ. 1QFY26 CNP rose 47.5%, supported by a 45.0% decline in overall operating expenses, which cushioned the 6.8% drop in revenue. The revenue decline was mainly due to lower recognition from the property development segment, which fell 8.1% following higher sales conversion recognised in the previous quarter. Overall EBIT improved 66.1%, driving the strong CNP growth for the quarter.

 

Outlook. The Group continues to show strong sales momentum, achieving RM381.5m in new property sales in 1QFY26, with Sendayan Developments contributing RM174.4m and a healthy take-up rate of 81.6%. Its robust unbilled sales of RM1.5bn as at 30 June 2025 provide clear earnings visibility over the next 15–18 months. Growth is further supported by the upcoming Malaysia Vision Valley City (MVV City) project in Negeri Sembilan, spanning 2,382 acres with an estimated GDV of RM15.0bn. Strategic acquisitions of Horizon L&L Sdn Bhd, Exoland Property Management Sdn Bhd, and Horizon L&L (SEL) Sdn Bhd for RM77.9 m expand the Group’s presence in the high-growth Sepang and Banting corridors, with the newly acquired landbank carrying an estimated GDV of RM388.0m.

 

Earnings Revision. After incorporating FY25 audited numbers, newly acquired assets (GDV: RM388m) from recent acquisitions, and revamping our financial model to include the monetisation of incorporated landbanks, we have revised our FY26F/FY27F earnings forecasts higher by 1.9%/2.3% to RM252.0m/RM268.9m respectively. We also introduce FY28F CNP of RM321.1m. 

 

Valuation. Post earnings revisions, we maintain BUY with higher TP of RM1.72 (from RM1.53), maintaining a 30% discount to RNAV and supported by a three-star ESG rating.

 

Risk. Higher-than-expected construction costs, changes in housing and property regulations, potential labour shortages, and market saturation affecting sales absorption.

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