Share
At a Glance
• 4QFY10 earnings above our expectations; 8 sen gross DPS (FY09: 5 sen) declared – a decent 4.3% net yield
• U-Thant high-end condos launch-ready
• Potential rebranding soon to Wing Tai Malaysia
• Maintain Buy, and TP of RM2.25, based on 40% discount to RNAV of RM3.72
Comment on Results
4QFY10 net profit came in at RM19m (+213% y-o-y, +78% q-o-q), bringing full-year earnings to RM49m (+101%, ex-land sales gains). Strong growth was driven by more advanced construction progress at Verticas Residensi and robust retail sales. DNP is fast becoming a full-fledged niche developer with property development constituting 78% of EBIT (FY10: 54% vs FY09: 24%).
Take up for Verticas Residensi Tower B has reached 15% (but only 1/3 of total 135 units have been opened up for sale since Jan10). Sales momentum has expectedly eased (vs Tower A’s 70% sales in 6 months) with higher ASP (RM1100psf vs RM950psf). Upcoming launches: a) U-Thant high-end condos (2H10, 25 units, ASP: RM1100psf), b) Le Nouvel luxury condos opposite PETRONAS Twin Towers (2H11, 197 units, ASP: RM2000psf), c) Sunway semi-detached (vs shopoffices previously due to strong demand for landed properties, ASP: >RM2m/unit). With low gearing of 5%, DNP is positioned to landbank.
Recommendation
Maintain Buy, and TP of RM2.25 (40% discount to RNAV of RM3.72). We tweaked FY11-12F earnings by -2% and +9% respectively to reflect slower take-up for Verticas and new Sunway semi-detached launch. DNP is one of the cheapest Malaysian developers (still trading below NTA) despite having one of the strongest earning growth potentials. We understand DNP may possibly be rebranded soon to leverage more on Wing Tai’s strong brandname and institutional following.
• 4QFY10 earnings above our expectations; 8 sen gross DPS (FY09: 5 sen) declared – a decent 4.3% net yield• U-Thant high-end condos launch-ready
• Potential rebranding soon to Wing Tai Malaysia
• Maintain Buy, and TP of RM2.25, based on 40% discount to RNAV of RM3.72
Comment on Results
4QFY10 net profit came in at RM19m (+213% y-o-y, +78% q-o-q), bringing full-year earnings to RM49m (+101%, ex-land sales gains). Strong growth was driven by more advanced construction progress at Verticas Residensi and robust retail sales. DNP is fast becoming a full-fledged niche developer with property development constituting 78% of EBIT (FY10: 54% vs FY09: 24%).
Take up for Verticas Residensi Tower B has reached 15% (but only 1/3 of total 135 units have been opened up for sale since Jan10). Sales momentum has expectedly eased (vs Tower A’s 70% sales in 6 months) with higher ASP (RM1100psf vs RM950psf). Upcoming launches: a) U-Thant high-end condos (2H10, 25 units, ASP: RM1100psf), b) Le Nouvel luxury condos opposite PETRONAS Twin Towers (2H11, 197 units, ASP: RM2000psf), c) Sunway semi-detached (vs shopoffices previously due to strong demand for landed properties, ASP: >RM2m/unit). With low gearing of 5%, DNP is positioned to landbank.
Recommendation
Maintain Buy, and TP of RM2.25 (40% discount to RNAV of RM3.72). We tweaked FY11-12F earnings by -2% and +9% respectively to reflect slower take-up for Verticas and new Sunway semi-detached launch. DNP is one of the cheapest Malaysian developers (still trading below NTA) despite having one of the strongest earning growth potentials. We understand DNP may possibly be rebranded soon to leverage more on Wing Tai’s strong brandname and institutional following.
SHARE
