JF Apex initiates coverage on A&M with 'buy' call

by **Cals** Mon 28 Apr 2014, 13:14

Business & Markets 2014

Written by Jeffrey Tan and Ahmad Naqib Idris Adzman Shah of theedgemalaysia.com

Monday, 28 April 2014 11:41

KUALA LUMPUR (Apr 28): JF Apex Securities Bhd has initiated coverage on A&M Realty Bhd, with a “buy” call and a target price of RM2.12.

“We view A&M as a deeply undervalued property developer as its major landbank in Carey Island is now worth RM10psf-15psf against book value of less than RM1psf sitting on the balance sheet,” said the research house in a report today.

JF Apex said that the group’s key property projects in Carey Island and Sungai Buloh would significantly boost its earnings FY15 onwards.

The group plans to develop its 784.3ha (1,938 acres) landbank at Carey Island into an integrated township, Amverton Cove, with a GDV of RM10 billion and planned launches of RM738 million from 2014 to 2018.

With the township, A&M will be able to capitalise on the spillover demand from Canal City, Kota Kemuning, after the completion of the Carey Island access interchange to the South Klang Valley Expressway and the West Coast Expressway.

The group had also earmarked its recently acquired 58.7ha (145 acres) land in Sungai Buloh for Amverton Hill, a residential property project.

The project has a GDV of RM643 million and is expected to be launched from 2014 to 2018.

“We expect this project to be well received in view of its superior location in this hotspot with upcoming MRT stations,” said the research house.

JF Apex also noted the group’s improved trading liquidity, as A&M’s major shareholder recently placed out 20 million shares or 5% to 6% stake to institutional investors to improve its share liquidity and investment profile.

“The improved trading liquidity of the Group coupled with the positive earnings outlook and deeply undervalued prized landbank in Carey Island has ignited investors’ interest on the stock, witnessed by the improving trading volume,” JF Apex said.

At 11.22 am, A&M’s shares were traded at RM1.47, up 3 sen or 2.1% with some 953,300 shares done.