LBS BINA GROUP BHD

By JF Apex Securities Bhd Rating: Buy (Maintained) Target price: RM2.50

JF Apex maintained a “buy” rating on LBS Bina Group Bhd with a higher target price of RM2.50 (previously RM2.27) based on 30% discount to its revalued net asset value/share of RM3.57 (upward revision from RM3.49 after factoring in LBS Bina’s project in Seri Kembanga with potential GDV of RM600mil, higher valuation in its 51% stake in ML Global, following rising share price, and the impact of RCPS.

LBS Bina’s stronger y-o-y performance in third quarter of 2017 and nine months of 2017 bottom line was attributable to better top line, as underpinned by its existing projects namely Bandar Saujana Putra, D’Island Residence, Bandar Putera Indah, Sinaran Mahjota, Midhills, Desiran Bayu and Zenopy Residences.

JF Apex said LBS Bina chalked up RM1.3bil new sales as of end-November 2017 (up 18% y-o-y against RM1.1bil as of end November 2016), which accounted for 89% of the management’s full year new sales target of RM1.5bil.

“New sales achieved from January till November 2017 were mainly contributed by Bandar Saujana Putra and recently launched Alam Perdana in the Klang Valley, as well as Midhills in Genting Highlands,” JF Apex noted.

The group’s unbilled sales are still resilient, increasing further to RM1.6bil as of Oct 2017 or equivalent to 1.6 times of its 2016 topline.

According to JF Apex, LBS Bina plans to replicate the success of its flagship township, Bandar Saujana Putra in Alam Perdana.

The propery developer will be focusing on affordable homes under this project.

Located in Ijok, Alam Perdana is a 470-acre leasehold township development that will be developed over eight phases. It has a GDV of RM2.9bil.

The township’s first two developments, Simfoni Perdana and Irama Perdana, have gained positive response from home buyers.

Under Simfoni Perdana, LBS Bina has launched 168 units of two-storey townhouses worth GDV of RM65mil (gross built-up area from 1,191 sq ft) with competitive pricing of RM369,000 per unit. Meanwhile, for Irama Perdana, the group has launched 349 units of two-storey houses (GDV of RM170mil) and is about to launch another 324 units (GDV of RM161mil) to cope with the strong demand. Average built-up area for Irama Perdana is 1,208 sq ft with affordable pricing of RM480,000 per unit. Besides, LBS Bina targets to launch a block of serviced apartment named Residensi Bintang in Bukit Jalil project which consists of 730 units worth GDV of RM500mil.

Built-up areas range from 803 sq ft to 1006 sq ft with RM545,000 to RM650,000 per unit.