Matrix Concepts Holdings (MCH) ended FY24 with net profit of RM60.6m (+7.2% YoY, -5.4% QoQ) for 4QFY24 which came in largely within our and consensus expectations. For FY24, Group net profit of RM246.5m constituted about 100% of both our and consensus full year estimates. The Group surpassed its FY24 sales target (RM1.1bn) after chalking RM1.2bn during the financial year with average take-up of 81.1%. Unbilled sales, meanwhile, remains steady at about RM1.2bn, providing substantial earnings visibility for the next 15-18 months. All told, no change to our earnings estimates. Maintain Neutral with bookvalue based target price (TP) of RM1.80. That said, the stock is currently offering an attractive dividend yield of about 5.6%.

• 4QFY24 revenue rose 19.6% YoY to RM353.1m, driven primarily by robust performance in the property development segment, improving by 17.2% YoY to RM341.8m. Again, the Group’s flagship Sendayan Developments continued to underpin its profits after contributing a significant 30.8% YoY increase in revenue to RM326.8m. However, the revenue uptrend was slightly offset by a decline in revenue contribution from its Australian and Klang Valley property development activities, attributable to the completion of M. Greenvale and The Chambers in the previous year. Elsewhere, the Group’s township development in Kluang, Bandar Seri Impian, reported lower contribution with its revenue dropping 44.2% YoY to RM12.2m

• FY25 launch target worth RM1.65bn largely includes new phases within its flagship Sendayan Developments. Elsewhere, the Group’s Indonesian development, Menara Syariah in Pantai Indah Kapuk 2, Jakarta, Indonesia has also been successfully completed end-2023. As reported earlier, MCH is looking to either dispose one block or keep both for recurring income. We understand that MCH had initially expected at least 20% margins if it disposes the two towers outright. Now, we believe the value could be higher, given the land value alone is already transacted at 3x its original cost (MCH’s initial investment of USD31.75m for a 30% stake).

Source: PublicInvest Research - 28 May 2024