PR1MA residential project likely to further boost AQRS’s profile

KUCHING: Gabungan AQRS Bhd’s (AQRS) profile in the construction and property sector will likely be further lifted if the residential property project with PR1MA Corporation Malaysia (PR1MA) commences successfully.

To note, AQRS entered into a joint development agreement (JDA) with PR1MA to develop and construct residential units in Kuantan over three phases on a 100.83-acre land. The gross development value (GDV) of the project is RM335.95 million.

The project comprises 320 units of single-story terraced and single-story semi-detached in the first phase, 328 units in the second phase and 417 units in the third phase. This is expected to be completed over 84 months or seven years.

PR1MA has agreed to deliver vacant possession of the land to AQRS and to grant it exclusive right to develop the land.

“Once it is given the go-ahead, the project will further boost the group’s profile in construction and property development while contributing positively to its future financial performance,” said the research team at MIDF Amanah Investment Bank Bhd (MIDF Research) in a report.

Excluding this new development, the research team noted that AQRS’ order book currently stands at about RM1 billion, with earnings visibility up to FY24.

About 73 per cent of these projects are government-related, therefore risks of lower margins are avoidable as government jobs usually come with variation of price (VOP).

“We are maintaining our earnings estimates for now, pending further clarity on the approval and commencement of the project.

“Note that the commencement of the project is subject to and conditional upon fulfilment of conditions precedent within a 10-month period and PR1MA has the sole discretion of extending the approval period for a further three months,” it said.

All in, MIDF Research maintained its ‘buy’ recommendation on the stock.