Matrix’s 3QFY19 misses expectations, prospects to be driven by strong sales

KUCHING: Matrix Concepts Holdings Bhd’s (Matrix) third quarter of the financial year 2019 (3QFY19) results missed expectations but analysts believe that its outlook will continue to be driven by strong sales.

The research team at Hong Leong Investment Bank Bhd ( HLIB Research) noted that Matrix’s 9MFY19 revenue of RM769 million translated into core profit after tax, amortisation, and minority interest (PATAMI) of RM151.7 million which came in below expectations.

It pointed out that the lowerthan-expected results were largely due to a lower than expected margin product mix.

Nevertheless, it highlighted that Matrix’s 3QFY19 new sales came in at RM243 million. It added that Matrix’s RM243 million new sales consists of sales from existing townships (62 per cent), Chambers KL (30 per cent), and the remaining are industrial (eight per cent) while unbilled sales remained healthy at RM1.4 billion, representing a healthy cover ratio of 1.7-folds.

“Earnings visibility will continue to be supported by the strong new sales and unbilled sales of 1.7-folds cover.

“We understand that over RM500 million worth of gross development value (GDV) will be launched in 4QFY19 including Tiara Sendayan 3 & 4, Ara Sendayan (Phase 5) and Impiana Bayu 3A, on track to meet full year launch target of RM1.7 billion,” HLIB Research said.

Overall, it maintained the stock’s ‘ buy’ rating and said: “We continue to like Matrix as it is well-positioned to ride on affordable housing theme within its successful townships with cheap land cost and sustained property sales.

“This is supported by an attractive dividend yield of 6.2 per cent for FY19 and seven per cent for FY20, being one of the highest in the sector.”