Sunrise 1QFY09 : A slow quarter
• Below expectations.
1QFY09 results were below house as well as market expectations. On an annualised basis, net profits came in at 72.0% and 78.3% of house and consensus estimates respectively. As expected, no dividends were proposed during the quarter.
• Revenue +51.7% y-o-y, net profit -59.9% y-o-y.
While revenue was higher than a year ago, net profit was substantially lower due to a RM46.6m one-off gain from the sale of Plaza Mont Kiara and land sale in 1QFY08. On q-o-q basis, revenue and net profit were lower by 23.2% and 32.8% respectively due to the completion of Mont Kiara Banyan in the last quarter. To a certain extent, we are not surprised by lower revenue this quarter as profit recognition of new projects such as MK 11 is expected to be slower at the early stage of construction but is expected to accelerate in the coming months. Furthermore, the newly completed MK 16B bungalows have just been launched and are expected to contribute significantly as and when they are sold.
• Decent sales during the quarter.
Sales of RM216m were recorded during the quarter as compared to our expectation of RM664m of sales for FY2009. Unbilled sales are currently at RM1.37bn. We believe the bulk of the sales came from conversion of bookings for MK11 which has achieved 65% take-up. This means that
there were hardly any “new” sales during the quarter besides conversion of bookings, which partly explains the underperformance this quarter. Annualised 1QFY09 results would have met about 90% of our full year estimate if expected “new” sales are excluded.
• Maintain BUY call.
We are leaving our estimates unchanged for now but will re-visit it again in the following quarter. BUY call is maintained while target price is unchanged at RM2.32 (30% discount to RNAV of RM3.32).