Paramount Corporation Berhad ("Paramount")'s 9MFY24 results met expectations. 3QFY24 earnings were stronger by 22.8% YoY, underpinned by better revenue from Property segment and lower tax expenses. New property sales of RM993 mil were 9% higher YoY drove the unbilled sales to RM1.5 bil from RM1.4 bil as of end Dec 2023. Special dividend of 3 sen/share. We have a BUY recommendation on the stock with target price of RM1.46, based on 40% discount to RNAV (3-star neutral ESG rating), backed by attractive dividend yield of 6.5% and undemanding valuation of 7.2x FY25 PE.

• Met expectations. Paramount recorded core net profit of RM51.6 mil, tracking expectation at 71.5% and 74.2% of our and consensus full year estimates respectively. The Company announced dividend of 3 sen/share, bringing YTD dividend to 6 sen/share.
• Better 3QFY24 earnings driven by Property segment and lower tax expenses. During the quarter, Paramount's revenue and core net profit grew by 2.5% and 22.8% YoY respectively due to better revenue from Property segment and lower tax expenses. The key projects contributed to the 3QFY24 revenue were Sejati Lakeside 2 development in Selangor, followed by Paramount Palmera and Utropolis Batu Kawan in Penang.
• Stronger new property sales. For 9MFY24, Property segment sold RM993 mil worth of properties, which was 9% higher as compared to the same period last year. In term of property launches, Paramount launched a total GDV of RM2.0 bil. The Group targets to launch Uptown Residences 2 at Berkeley Uptown with a projected GDV of RM163 mil. Unbilled sales of RM1.5 bil will provide earnings and cash flow visibility moving forward.

Source: AmInvest Research - 28 Nov 2024