KUALA LUMPUR: Maybank Investment Research has maintained its “Hold” call and earnings forecast on Tanbun Indah Land Bhd (TILB) but lowered its RNAV-TP to RM1.39 on a lower P/RNAV peg of 0.45x from 0.5x. 

“TILB has been focusing on clearing its unsold units under construction thus far. It also intends to sell the Bumiputra lots released under the Raintree Park 1 & 2. This should lead to better take up rates in Raintree Park 1 & 2 (from the current 61% to 89% take-up rates) as sales should pick up in the coming quarters, we believe. The company has locked in RM36.2mil sales in 1Q2017, or 20% of its 2017 sales target.

“Management is confident of achieving its sales target of MYR180m for 2017 supported by RM171mil worth of new property launches and RM249.8mil worth of unsold stocks as at end March 2017.

“Thus far, it has launched two new projects worth RM122.7m in GDV in 1H2017. Elsewhere, Straits Garden commercial lots are >90% leased; however, investment properties’ contribution remains insignificant to TILB (<10%).”

Maybank Research expects TILB's net profit to decline 29% in 2017 and 44% in 2018 due to slower property sales in the last two years.

“We maintain our earnings forecasts but trim our TP to MYR1.39, which is based on a lower 0.45x P/RNAV in view of rising unsold stocks and stiffer competition in both the Penang island and mainland. The stock is backed by 5.5% net yield (2017). TILB has been paying out 40-50% of its net profit as dividend since 2010,” it says.

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