Titijaya Land’s Fundamentals Remain Intact: AmResearch

• Titijaya Land’s fundamentals remain largely intact, with unbilled sales of RM732 million (2.2 times FY15 property development revenue) and a strong balance sheet (net cash at RM7 million), according to AmResearch.

• The research house noted that the firm’s stock is currently trading at a steep 60 percent discount vis-a-vis its revised net asset value (NAV) per share of RM4.54.

• The group had earlier reported FY15 results that were within AmResearch’s expectation, with net profit rising 13 percent year-on-year largely on good progress recognition on some of its key projects.

• For FY16, Titijaya is expected to adopt a more cautious stance in focusing on its existing pipeline of projects rather than over-committing itself to drive pre-sales growth amid a tougher operating environment.

Significance: Given the deep discount to NAV, AmResearch has maintained its ‘Buy’ call on the stock, though with a lower fair value of RM2.72 based on a wider discount to its revised NAV, which reflects lower new property sales assumption for FY16F given the weaker sentiments prevailing on the property market.

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