Share
1QFY2010 Results Review: Lower as expected
Although Faber’s 1QFY2010 net profit made up only about 15% of our and consensus’ full-year net profit forecast, we view this as being largely in line with our expectation as 1Q is historically Faber’s weakest quarter. We envisage better performance from its property division moving forward supported by the launch of new projects this year. We maintain our forecast and our BUY recommendation at an unchanged TP of RM2.75 based a SOP valuation. Faber is currently trading at a rather attractive PER valuation of 8.5x and 7.8x PER on FY10 and FY11 EPS respectively.
Largely in line. Faber’s net profit of RM14.4 million for 1QFY2010 accounts for around 15% of our full-year net profit forecast for FY2010. Nevertheless, we view the results as being largely within our expectation given that historically 1Q is the weakest quarter. We expect better performance from its property division going forward. Revenue jumped 30.6% y-o-y while net profit surged more than 98% y-o-y, largely attributed to contribution from its IFM business in UAE and local concession business, which was 6% higher y-o-y.
Lower q-o-q as expected. As expected, Faber’s revenue and net profit for 1QFY2010 fell 39.6% and 65.8% q-o-q respectively, largely due to the one-off revenue from its IFM contract in Abu Dhabi being recognised only in 4QFY2009 although the contracts were secured in 1HFY2009. The property division reported a significant q-o-q drop due to lower revenue as well as the impact from the adoption of the FRS 8 accounting guideline effective 1QFY2010. Nevertheless, we see stronger performance from its property division on the launch of new projects in Taman Desa and Laman Rimbunan.
Maintain BUY on attractive valuation. We maintain our forecasts for FY2010 and FY2011 as well as our BUY recommendation at an unchanged TP of RM2.75 based on SOP valuation. Following the recent correction in its share price, Faber is now trading at 8.5x and 7.8x PER on FY2010 and FY2011 EPS respectively, which we deem attractive compared to the overall market, which is trading at more than 15x PER on FY2010 EPS. Moving forward, we also believe there is potential upside in dividend payout given that currently Faber only declares less than 30% of PATAMI as dividend.
