Titijaya Land : Staying true to its affordable housing core HOLD

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Titijaya Land : Staying true to its affordable housing core                                               HOLD

We resume coverage on Titijaya with a HOLD call at a higher fair value of RM1.72 per share, based on a 20% discount to its RNAV. We were encouraged by the management’s commitment to continue focusing on the affordable segment, with the majority of its new launches in FY17 and FY18 catering to this particular segment. We believe the demand would remain resilient even during the current sector slowdown. Management has lined up new launches with a total of RM2bil GDV in 2017. The biggest launch is The Shore @ KK in Kota KInabalu (GDV: RM575mil), followed by 3rdNvenue Phase 1 at Jalan Ampang (GDV:  RM493mil), Damansara West Phase 1 (GDV: RM361mil), Riveria Phase 1 at KL Sentral (GDV: RM317mil), H2) Block B at Ara Damansara (GDV: RM191mil) and Park Residensi @ Cheras (GDV: RM75mil). As for the long term, it has projects valued at around RM13bil GDV expected to be launched in the next few years, which will keep it occupied until 2027 and provide a sustained earnings visibility to the group. 

As at end-1HFY17, Titijaya’s net gearing stood at 33%, which provides the company ample room to undertake land banking. Titijaya’s total unbilled sales stood at RM471mil as at end-1HFY17, which would provide earnings visibility to the company for the next two years. Titijaya’s proposed renounceable rights issue of up to 614.99mil irredeemable convertible preference shares (ICPS) on the basis of three ICPS for every two existing shares of 50 sen each, with a conversion ratio of either 10 ICPS into one share or a combination of 1 IPS and cash payment of RM1.485 for one share. This will strengthen Titijaya’s position to fund its ongoing projects and source for landbank.

Others :

WCT Holdings : Lands RM186mil LRT3 job                                                                                              HOLD

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