YNH Property 3QFY08 : Within expectation

December 2, 2008 at 7:57 am Leave a comment

• Within expectation.
9MFY08 results were in line with house and market expectations. On annualised basis, 9MFY08 results came in at 95.7% and 95.2% of house and consensus estimates. No dividends were proposed during the quarter
but management re-affirmed its commitment to a minimum 30% payout.
• Revenue +73.8% y-o-y, net profit +14.1% y-o-y.
As expected, revenue and net profits for first 9 months were stronger y-o-y mainly due to contributions from Lot 163 and Ceriaan Kiara. However, 3QFY08 revenue was lower 45.5% q-o-q due to a stronger topline growth in the previous quarter from construction jobs. About 40% of revenue in 2QFY08 came from construction jobs with lower margin of 10%. This also explains the q-o-q recovery in EBIT margin from 26.6% to 42.0%.
• Business still brisk…
Unbilled sales is currently at RM550m, excluding the RM920m en bloc sale of Menara YNH to Kuwait Finance House which is still pending finalisation of design. YNH’s latest project, Kiara 163, a commercial project in Mont Kiara with GDV of RM1bn has been well received since its soft launch a couple of months ago. So far, it has secured RM250m sales for office and retail space. The company is now negotiating for some bulk sales for the service apartments with asking price of RM800 to RM1,000 psf on a fully-furnished basis, which comes with a rental guarantee for 3 years.
• …but expectation has to be lowered for implementation.
We have lowered our expectation on commencement of construction as we expect YNH to only start work upon achieving “comfortable” level of sales take-up.
• Reiterate BUY call.
We maintain our BUY recommendation with unchanged target price of RM2.73 (30% discount to RNAV of RM3.90).

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Entry filed under: Business, Finance, Stock Market. Tags: , , , , , , .

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