MGB's 3QFY24 core net profit grew by 31.2% YoY to RM16.0m, mainly due to better performance of its property division. The Group's 9MFY24 results were in line with both our and consensus estimates, making up 72.8% and 77.8% of full year forecasts. The Group's outlook remains positive, supported by its construction orderbook of approximately RM1.2bn and unbilled sales of RM0.7bn from ongoing property development projects. We maintain our earnings forecast and retain our Outperform call, with an unchanged SOTP derived TP of RM1.16.

• 3QFY24 topline rose 12.9% YoY, primarily due to better performance of its property division. Revenue from the property division increased more than fourfold, or RM102.9m YoY, to RM132.2m, attributed to increased progress in the ongoing development projects of Idaman Melur, Idaman Cahaya Phase 1 & 2, Idaman Sari and Saujana Indah Phase 1 and 2. However, this was partly offset by lower revenue from the construction division (-30.8% YoY), mainly due to projects nearing completion, while new projects remained at the preliminary stages.
• 3QFY24 profit before tax (PBT) increased 24.3% YoY, mainly driven by remarkable improvement of its property division which grew more than fourfold YoY to RM18.2m, in line with higher revenue. However, this was partly offset by lower PBT from construction division (-66.5% YoY), mainly due to higher administrative expenses and cost incurred by its oversea subsidiary.
• Outlook. The Group remains focusing on the construction of affordable homes through innovation, technological advancements, and improvements in its construction processes. Additionally, the Group aim to secure new government projects and strengthen its presence in Saudi Arabia through strategic collaboration with Nordimpianti System S.R.L. and MCT Italy S.R.L. The Group's earnings visibility remains strong, supported by its construction orderbook of approximately RM1.2bn and unbilled sales of RM0.7bn from on-going property development projects.

Source: PublicInvest Research - 21 Nov 2024