LBS Bina FY22 sales target achievable

Strong target, new launches to drive growth

PETALING JAYA: LBS Bina Group Bhd’s sales target for financial year 2022 (FY22) appears achievable as it already has a strong booking pipeline and more aggressive new launches planned for the year.

Its new property sales came in at Rm593mil, which represented 37% of its FY22 sales target of Rm1.6bil as of May 17.

“Bookings stand at Rm561mil and LBS will focus on fast conversion of these bookings into sales,” said CGS-CIMB Research.

It also believed that the average take-up rate for the group’s ongoing projects is about 82% as of May 17, 2022. As at end-march this year, the unbilled sales were higher at Rm2.44bil versus Rm2.04bil in March last year.

RHB Research said it was upbeat on this target, given the 82% take-up rate for ongoing projects and bookings of Rm561mil in the pipeline.

Meanwhile, CGS-CIMB Research said LBS planned launches with a total gross development value (GDV) of about Rm1.77bil in FY22 include LBS Cybersouth (Rm854mil GDV), Alam Perdana (Rm123mil), D’island Residence (Rm131mil), Genting (Rm492mil), Bandar Putera Indah (Rm108mil) and Taman Kinding Flora (Rm64mil).

As of May 11, the group has only launched projects worth up to Rm188mil in GDV, where the bulk of the new launches are expected to be rolled out in the remaining quarters.

Given the strong booking pipeline and more aggressive new launches, CGS-CIMB believes its FY22 sales target should be achievable.

RHB Research said LBS reported first-quarter FY22 results that exceeded expectations, owing to the economy reopening since September 2021.

The research house remained positive on the group’s outlook following the strong performance in the quarter as the affordable housing segment continues to be in demand.

However, it has concerns over near-term headwinds coming from rising building material costs that could affect margins, as well as inflation and rising interest rates that may dampen consumer sentiment.

The research house raised its FY22-FY24 earnings by 11%-12% following the strong first-quarter net profit, raising its sales performance assumptions.

Its target price is left unchanged at 63 sen with its “buy’’ call maintained. It cited key risks being an extended soft property market, rising competition in the affordable housing segment and steep interest rate hikes.

CGS-CIMB Research has an “add’’ call on the stock with a target price of 64 sen. It also expects potential value arising from the development at Zhuhai International Circuit and improving balance sheet.

“Bookings stand at Rm561mil and LBS will focus on fast conversion of these bookings into sales.”

CGS-CIMB Research