AmWatch - Titijaya Land : Buoyant prospects moving into FY15 BUY, 28 Aug 2014

STOCK FOCUS OF THE DAY

Titijaya Land : Buoyant prospects moving into FY15          BUY

We maintain BUY on Titijaya Land with a slightly lower fair value of RM3.25/share (vs. RM3.30/share previously) on an unchanged 25% discount to its revised NAV/share, as we roll-over our valuation base to FY15F. Titijaya released its FY14 ended June results yesterday, with net profit hitting a record RM71mil. This was broadly in line with our estimates (+4%). For the 4QFY14 reporting period, net profit rose 9% QoQ on higher progress billings. The Seri Alam Industrial Park project was among the key contributors during the quarter. The group’s pre-tax margins however normalised to 31% in 4QFY14 from 40% in 3QFY14 (FY14: 34%).

FY14 sales surged c.77% YoY to RM450mil, partly underpinned by the good response received from its new projects such as Embun@Kemensah and H2O Ara Damansara. Titijaya declared a final single-tier DPS of 4 sen or a yield of 2%. This translated into a payout ratio of c.20%, which is within our estimates. We also introduce our FY17F net profit forecast of RM129mil (+14% YoY). 

More importantly, we remain bullish on Titijaya’s prospects moving into FY15F were we project its new sales to rise further to RM600mil (+33% YoY). The conversion of bookings received from the first two blocks of H2O will be crystallised during the current financial year. This is further backed by robust pipeline of launches inlcuding new launches/phases for Embun@Kemensah, H2O, and Trio service apartments in Shah Alam.

Equally, Titijaya's share will be supported by an increasingly robust landbanking momentum. Most recently, the group announced that it is looking to enter into a JV to co-develop a mixed-development project in Jln. Eaton, KLCC (GDV: ~RM2.5bil). Such a move would represent Titijaya’s first foray into the high-end KLCC residential market and lift our fair value by a further RM0.32/share or c.10% to RM3.57/share. 

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Jaya Tiasa Holdings : OER improves to 17.7%, FFB yield remains depressed            BUY

UMW Holdings : Earnings flatten out despite higher TIV HOLD

Axiata Group : Gestation period, look for better entry point        HOLD

RHB Capital : Accelerated pace of improvement in targeted segments    HOLD

Telekom Malaysia  : Capex guidance lowered, growth to flatten out?      HOLD

Genting Plantations : New plantings affected by RSPO   HOLD

Padini Holdings : FY14: Earnings +7% YoY               HOLD

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