Aussie project expected to boost Matrix Concepts performance

PETALING JAYA: Contribution from the M Greenvale project in Australia, which has unbilled sales of Rm76.1mil, is expected to help cushion Matrix Concepts Holdings Bhd’s slower progress billings from local projects, which have been impacted due to the labour shortage.

Matrix recorded a net profit of Rm50.6mil in the second quarter ended Sept 30, 2022 of its financial year 2023 (2Q23), bringing its first-half (1H23) profitability to Rm97.6mil.

However, revenue declined 7.2% year-onyear because of lower construction activities from a shortage of labour.

Hong Leong Investment Bank (HLIB) Research said the results were within expectations and expects “a lumpy contribution from its Australia project in 2H23”.

“Maintain a ‘buy’ with an unchanged target price (TP) of RM1.82 based on a 35% discount to its revalued net asset value of RM2.80.

“We continue to like Matrix as we believe its strategically located developments are well positioned to capture the spillover demand from the Klang Valley.

“The group also has a generous dividend payout ratio of over 50%, translating to a healthy projected dividend yield of 5.9% for financial year 2023 (FY23), being one of the highest in the sector,” HLIB Research said in a note to clients. In 2Q23, sales achieved were Rm352.7mil, making up 50.9% of HLIB Research’s full-year sales target of Rm1.3bil.

The property group launched Rm333.8mil of products from Bandar Sri Sendayan in 2Q23, bringing 1H23 total launch to Rm651mil.

Going forward, it plans to launch around Rm1.06bil of new products in 2H23, while unbilled sales stood at Rm1.4bil as at 2Q23, representing a healthy 1.64 times cover ratio of FY22 property development revenue, HLIB Research said.

As for the labour situation, the research firm said it understands that foreign labour had started coming in since 3Q22 and hence it expects gradual improvement from 4Q23 onwards. At the same time, raw material costs are also stabilising.

“We believe the upcoming new launches from its township should continue to be well received due to the well established road infrastructure and facilities in its mature townships; as well as the vicinity of Bandar Seri Sendayan township to the Greater Klang Valley region which allows it to capture spillover demand from the region,” it added.