Matrix Concepts Holdings Bhd - What is the extent of the competition from IJM Land in Seremban?

2/5/2014 - Matrix Concepts is confident of sustaining its profitability through the launches of its development projects, and the ongoing sale of development projects which have been launched.

It is planning to launch its Hijayu 1A (Phase 2) and Hijayu 3A development projects in Bandar Sri Sendayan, Seremban in Q1 and Q2 of FY14.

Matrix Concepts Holdings Berhad is a family-owned property developer with a long track record in Malaysia. It is focusing on developing township projects in Bandar Sri Sendayan in Seremban, Negeri Sembilan. The township, called Bandar Sri Sendayan, is about an hour’s drive from Kuala Lumpur and takes up 5,233 acres.

The company just announced earnings for Q4 FY13:

Revenue: +13% QoQ to RM 144.3 mln (the company did not reveal YoY figures)
Profit: RM 40.7 mln vs N/A (because company listed on Bursa in May 2013)
Cash flow from operations: RM 39.7 mln vs RM 34.6 mln
Dividend: 5 sen per share

Matrix Concept’s revenue for the current quarter mainly came from the sale of residential properties, which make up 96.1% of its total revenue.

The remaining 3.9% of its revenue came from the sale of land.

Based on a quarter-on-quarter basis, Matrix Concept’s revenue increased by 13% to RM 144.3 mln due to higher revenue recognition of the residential properties sold for the Nusari Bayu and Hijayu series residential development projects located in Bandar Sri Sendayan.

The group’s profit before tax also increased by 16% to RM 56.4 mln.

This came from the increase in revenue, especially from the Hijayu 3D development project.

Investor Central. Asian insights for global investors. We ask the tough questions of Asian companies which global investors need answers to.

Question

1. What is the extent of the competition from IJM Land in Seremban?

Besides Matrix Concepts, IJM Land also has a presence in Seremban through its developments in the Seremban 2 township and Seramban Heights.

According to RHB, the successful sale of the Kalista condos in Seremban 2 by IJM Land at end-2013 is a sign of the strong pent-up demand for mid-range housing in the area.

Although Matrix Concepts offers landed properties that are priced about 5%-10% lower (according to RHB) than IJM Land’s condominiums, how much competition is coming from IJM Land?

Is Matrix Concepts developing higher end projects in Bandar Sri Sendayan, which will compete with IJM Land?

Question

2. Does it see a risk of Seremban becoming crowded like Iskandar?

The current situation in the Johor property market is described Johor Real Estate and Housing Developers Association (Rehda) chairman Koh Moo Hing in The Star as being at risk of being flooded, especially by developers from China.

Competition has gotten more intense with developers such as China-based Greenland Group and Country Garden Holdings starting projects at Danga Bay.

Is Matrix Concepts assured that it will be the main player in the Seremban area, or does it see new competitors coming into the area as it becomes more developed?

Total number of questions in the full story: 10)


We have sent these questions to the company to invite them for an on-camera interview, and/or seek their written response.

So far, we have not had a reply (which is why you are seeing this message).

While our purpose is to ask the questions which the man on the street would ask, and to help the everyday investor make informed investments, please note that:

Our articles and presentations ('our contents') are not investment advice nor should they be construed as investment advice or any recommendation of any kind; nor meant to cast allegations or insinuations of any kind against any individuals or entities. Before acting on the material in our contents, you should either seek independent advice tailored to your particular circumstances and intentions or rely on your own judgement.

Our articles and presentations express our observations, opinions and theoretical analysis based on the facts that we have gathered or have been provided to us. While we endeavour to ensure that our contents are accurate and are presented in good faith, we cannot and do not warrant the accuracy, adequacy or completeness of the material or that the material is suitable for its intended use; and we disclaim any such warranties express or implied that may be presumed by any party; neither do we take responsibility for the views of companies or other stakeholders or observers or sources quoted or hyperlinked in our contents. While every precaution has been taken in the preparation of our contents, we (and our principals) shall not be liable for any losses or damage or inconveniences due allegedly to errors or omissions in any facts or due allegedly to reliance on our contents in any way whatsoever; nor for any damage to any computer hardware, date information or materials allegedly caused by our contents.

All expressions of opinion and observations in our contents are subject to change without notice and we do not undertake a duty to update and supplement our contents or the information contained herein in the event we obtain any further or more complete information.

©2014 Investor Central® - a service of Hong Bao Media