Titijaya Q2 property sales can hit RM100mil
AmInvestment Bank maintains ‘buy’ call on the stock
PETALING JAYA: AmInvestment Bank Research has estimated that Titijaya Land Bhd will be able to hit RM100mil in property sales in the second quarter of its financial year 2018 (FY18) despite the still soft local property market.
The research house said this would help to sustain the property developer’s unbilled sales amount at about RM400mil.
“Similar to the first quarter of FY18, we believe the bulk of the sales in the second quarter has come from the RM916mil fourblock H2O Residences in Ara Damansara,” it said. “At about RM835 per sq ft, we believe the high-rise residential project is being priced at a slight premium to similar products in the vicinity.”
The research house adjusted the stock’s fair value downwards to 95 sen from RM1.91 after it lowered its FY18-FY20 forecast fully diluted earnings per share by 37%-40% to reflect the recent one for one share split. It maintained a “buy” call on Titijaya. The research house noted that sales for Titijaya’s project in Ara Damansara have been strong after it differentiated itself from the others by branding itself as an aquatic-themed project.
“Given the compact sizes of 450-1,000 sq ft, the units are considered affordable in absolute terms,” it said.
According to AmInvestment, Titijaya has lined up some RM1.45bil in new launches for FY18, largely in the affordable segment such as the high-rise residential units in Damansara West, Bukit Subang (RM300,000-RM450,000 per unit) and The Shore @ Kota Kinabalu (RM455,000-RM810,000 per unit), as well as compact serviced suites in Riveria @ KL Sentral (RM340,000-RM780,000 per unit).
The research house said it likes Titijaya for its focus on the affordable high-rise residential segment in the Klang Valley, its strong earnings visibility backed by unbilled sales of about RM400mil and the RM8mil half-yearly rental for three years from November 2017 that it is receiving from Prasarana for the temporary occupation and usage of its 16-acre land in Shah Alam by LRT3 contractors.
The research house continues to be cau- tious on the property sector due to the generally still elevated house prices, the low loanto-value offered by the banks and house buyers’ inability to qualify for a home mortgage due to their already high debt service ratios.
It sees a bright spot in the affordable housing segment amid still subdued consumer sentiment against a backdrop of the rising cost of living.
“This is holding consumers back from committing themselves to the purchase of big-ticket items like a house,” it said.
The stock closed three sen higher in yesterday’s trade to 70.5 sen with 609,900 shares changing hands.