Hot Stock Matrix Concepts soars after 2Q net profit jumps 41%

by **Cals** Wed 20 Aug 2014, 22:21

Hot Stock Matrix Concepts soars after 2Q net profit jumps 41%

Business & Markets 2014

Written by Gho Chee Yuan of theedgemalaysia.com

Wednesday, 20 August 2014 12:06..

KUALA LUMPUR (Aug 20): Matrix Concepts Holdings Bhd saw its share price soar today after announcing a 41.3% jump in net profit for the second quarter ended June 30, 2014 (2QFY14).

Its share price had earlier risen as much as 7 sen or 2.18% to RM3.27 before settling at RM3.24 as at 10.56am. A total of 362,700 units changed hands.

Its warrants also climbed 3.64% or 1 sen to 28.5sen. It was traded between 28 sen to 29 sen today.

In a statement yesterday, Matrix Concepts Holdings Bhd said it planned to double its gross development value (GDV) to at least RM800 million by year-end from RM409 million as at June 30.

“As at the end of June 2014, we had RM1.068 billion ongoing development projects in Negeri Sembilan and Johor. Unbilled sales amounted to RM434.7 million, which will eventually be recognised till 2016,” Chairman Datuk Mohamad Haslah Mohamad Amin said.

The group is also confident profitability will be sustained through the launch of new projects as well as the continuous sales at current development projects.

Commenting on the company's quarterly financial result, Hong Leong Investment Bank expected the group to continue benefiting from escalating land prices in Seremban as more Greater KL residents migrate to Seremban.

"We are also optimistic on its land replenishment for its Sendayan Tech Valley (STV) project," the firm said in a note to clients today.

The bank also pointed to the undemanding FY15E price-to-earning ratio (PER) of 8.1 times versus more than 12 to 19 times for mid to large-cap developers, and still attractive FY14E dividend yield (DY) of 4.9%, based on 40% payout ratio as plusses for the company.

Nonetheless, it cautioned on the lack of landbank diversification which means the company's fate is completely tied to that of Seremban.

"Despite this, we maintain our positive outlook for its future sales and earnings. We maintain our target price at RM3.74, a 20% discount to revised net asset value (RNAV), which implies FY15E PER of 9.3 times," the note said.

BIMB Securities Research has maintained its "buy" rating on Matrix Concepts Holdings Bhd at RM3.20 with a higher target price of RM3.55, saying Matrix Concept’s 1HFY14 net profit was in line with house and consensus’ estimates.

In a note Wednesday, the research house noted Matrix Concepts’ 1HFY14 net profit had improved by 22% quarter-on-quarter and 11% year-on-year respectively.

BIMB Securities said the double digit improvements were in tandem with higher sales recognition chiefly attributed to the Group’s Hijayu 1A (Phase 1) development project.

“We maintain our FY14 and FY15 earnings forecasts and rolled over our valuation to FY15 earnings estimate to derive current target price of RM3.55. Maintaining our 'buy' recommendation,” it said.