Lagenda Properties Bhd - Within Expectations
Thu, 28-Aug-2025 09:05 am
by Research Team • Apex Research

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LAGENDA (7179)

Target Price (RM)

1.530

Recommendation

Buy

  • LAGENDA’s 2QFY25 CNP came in at RM45.3m (-6.3% YoY, +7.0% QoQ), bringing 6MFY25 CNP to RM87.7m (-3.7% YoY), which accounts for 43.6% of our full-year forecast and 43.8% of consensus estimates. The results were deemed within expectations, as we expect a stronger ramp-up in the second half, backed by strong unbilled sales of RM1.05bn.

  • The Group announced an interim dividend of 3.0 sen (2QFY24: 3.0 sen).

  • We maintain our earnings forecast and have introduced FY27F earnings of RM304.6m.

  • We maintain our BUY recommendation with an unchanged target price of RM1.53, based on a 30% discount to our RNAV valuation and appraised with a three-star ESG rating.

 

Results within expectations. Excluding the loss on disposal of property, plant, and equipment (+RM0.1m), 2QFY25 CNP came in at RM45.3m, bringing 6MFY25 CNP to RM87.7m, which accounts for 43.6% of our full-year forecast and 43.8% of consensus estimates. The results were deemed within expectations, as we expect a stronger ramp-up in the second half, backed by strong unbilled sales of RM1.05bn.

 

Dividends maintained. The Group announced an interim dividend of 3.0 sen (2QFY24: 3.0 sen).

 

YoY. CNP slipped 6.3% YoY, primarily due to a decline in revenue from the property development segment. The segment’s PBT fell 4.4%, as lower contributions from completed and near-completion projects outweighed gains from ongoing and newly launched developments. While the trading and other segments showed mixed results, overall PBT declined 7.4% to RM61.0m, driving the decrease in CNP.

 

YTD. CNP declined 3.7% to RM87.7m despite revenue rising 6.8% to RM503.3m. The revenue growth was supported by new project launches, including La’ Indera, Lagenda Ardea Phase 2, and La’ Lumière Phase 1A, as well as progress in ongoing developments. However, the CNP decline was primarily due to lower gross profit margins from affordable housing commitments and higher finance costs.

 

QoQ. On a sequential basis, CNP rose 7.0% despite a revenue decline of 9.7%. The increase in CNP was mainly driven by higher gross margins in the property development segment, resulting from cost savings, which offset the impact of slower construction progress and lower sales from nearly sold-out projects.

 

Outlook. Looking ahead, the Group’s multi-state expansion is beginning to bear fruit, underpinned by unbilled sales of RM1.05bn to be recognised over the next 2–3 years and outstanding bookings of RM276.6m, providing strong revenue visibility. This was reinforced by record quarterly sales of RM413.4m, driven by strong demand across all Johor developments. With government support for affordable housing, the Group is well-positioned to capitalise on affordability trends and sustained demand for landed housing.

 

Earnings Revision. No changes to current forecasts. We have introduced FY27F earnings of RM304.6m.

 

Valuation. We reiterate our BUY recommendation with an unchanged target price of RM1.53, based on 30% discount rate to our RNAV valuation and appraised with a three-star ESG rating.

 

Risk. Rising construction costs, changes in housing policies or property regulations, and slower-than-expected sales absorption of new developments.

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