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22 May 2024

STOCK NAME : LAGENDA (7179)

LAGENDA PROPERTIES BERHAD, 

an investment holding company, engages in the property development business in Malaysia. It is also involved in building construction; property management and other business management activities; and trading of building materials and hardware products. The company was formerly known as D.B.E.

Gurney Resources Berhad. The company was incorporated in 2001 and is based in Seri Manjung, Malaysia. Lagenda Properties Berhad is a subsidiary of Lagenda Land Sdn Bhd.

TECHNICAL CHARTS

LAGENDA - Correction stage should be over and accumulation is done. The price's ready and should move beyond RM1.75 and breach RM180 immediately to meet the target RM1.85 and their value RM2.00

Resistance ; RM1.75, RM1.80 & RM1.85

Support : RM1.65 and RM1.60

KIM'S TARGET PRICE

Stock Price : RM1.70 

Status : Undervalued

IMD TP : RM1.85

TP1 : RM2.00 (Fair Value)

TP2 : RM2.50

WARRANT :

LAGENDA-CD : 0.12 sen

TP : 0.30 - 0.50 sen

KEY'S PROFILE

• Lagenda signed a shareholders’ agreement with Sime Darby Property’s wholly-owned Seed Homes to set up Seed Homes Lagenda, a 50:50 joint venture to develop affordable homes.
• Seed Homes Lagenda is set to embark on its first affordable township project in Gurun, Kedah via the acquisition of a 249-acre of land from Sime Darby Property for RM50mil.
• The estimated gross development value (GDV) is expected to be RM750mil. The project will be developed over a span of 3-4 years.
• The township is anticipated to comprise 3,000 units of single-storey terrace house, with an average selling price of not more than RM250K/unit.
• Lagenda plans to launch the first phase of this Gurun project by end of FY24 or in early 2025.
• The land price of RM50mil translates to RM4.61 psf and implies a land cost-to-GDV ratio of 6.6%, which is lower than the industry’s average land cost-to-GDV ratio of 15%-20%.
• The projected net development profit margin of 20% for the Gurun project mirrors that observed in Lagenda’s existing matured projects in Setiawan and Teluk Intan.
• Collaboration between Lagenda and Sime Darby Property, potentially allowing Lagenda to capitalise on Sime Darby Property's extensive landbank in Malaysia for further development in its affordable housing segment.
• Lagenda's ongoing township in Kedah, which includes 1,924 units, has experienced a remarkable response, attaining a take-up rate >99% for phase 1 and 2. The collaboration comes at an opportune moment to address high demand for affordable housing in Kedah.
• The company’s niche in underserved landed affordable housing developments in second-tier states with a large population of B40 and M40 income groups.

KIM'S VIEW

• Latest News : - They buy the three plots of land from plantation company Hock Lean Rubber Estate Sdn Bhd to expand its land holdings and solidify the group’s position as a developer of affordable townships in Kedah.

• LAGENDA buying 855 acres of freehold land in Kuala Muda, Kedah for RM148.98 million to capitalise on the demand for affordable housing.
• The latest news is very good for company expanding their business further and future.

• This year 2024 the group poised to be a vibrant and exciting year for Lagenda as they plan to launch over 8,000 units of affordable homes, more than doubling the figure from 2023

• As of December 31,2023, the Group's unbilled sales stood at RM732.41 million, while outstanding bookings reached RM268.31 million, providing future revenue visibility.
• Beyond sales figures, the group expanded their geographic footprint in 2023, launching projects in three states: Perak, Kedah, and Johor.
• In Johor, they currently have a sizable remaining landbank of approximately 1,500 acres of land with an estimated Gross Development Value (“GDV”) of RM5.60 billion, where the group plan to launch three townships by the end of 2024.
• This expansion reflects their positive outlook on this vibrant state and the potential it holds.

• The group also believe there is vast untapped demand for affordable housing in Johor, where a significant number of households still lack homeownership.

• Additionally, they have the option to acquire another 200 acres in Johor, providing the group with flexibility and the opportunity to further expand their presence in this promising market.

• The group are ramping up to commence launches in two new states, Selangor and Pahang, expanding their presence to five states by year-end.

• This nationwide presence allows them to cater to a broader range of buyers and contribute to the housing needs of communities across Malaysia. Given these factors and barring unforeseen circumstances, the Board anticipates enhanced performance for FY2024

• Strong exposure in the affordable housing segment which is strongly aligned with the mass market demand. Demand for affordable housing, particularly units priced below RM500,000, is projected to remain resilient and is supported by various government initiatives.

• Lagenda is supported by unbilled sales of RM855 million, providing earnings visibility over the next 12 months
  

• Lagenda Properties rebounding in FY2024 on record-high unbilled sales, Johor expansion.

• The group's current higher confirmed sales of RM289 million, expects Lagenda's unbilled sales to climb and reach a record high of RM855.1 million, which will provide revenue visibility until 2025.

• Expects 2024 to be a vibrant and exciting year for the group, as it plans to launch over 8,000 units of affordable homes, more than doubling the figure from 2023.

• Its net profit for the fourth quarter ended Dec 31, 2023, stood at RM41.85mil, compared with RM44.65mil in the previous corresponding period. Revenue rose to RM248.09mil from RM236.07mil a year earlier.

• Incoming Q4FY24 I assume and predict at RM50 - RM60 million.

​

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