News by HLIB Research

Pesona’s order book stands at RM2.1 billion, translating into a strong cover ratio of 5.4 times on FY2016 construction revenue.

Kimlun Corp Bhd posted record earnings for its financial year 2016 (FY16) with RM81.9 million (up 16% year-on-year [y-o-y]).

All of Pesona’s existing jobs are either government-related or from listed property developers in Singapore, Malaysia and Thailand.

The deferred launch of Sunway Geo Residences 3 is mainly due to resubmission of plan for the subdivision of land to include additional walkway connecting to the bus rapid transit line. The effective sales for the nine months in FY16 already achieved RM638 million, which was contributed mainly by Sunway Mont, Iskandar, Gandaria, Singapore and China.

Aside from the upcoming REIT listing of its warehousing assets, the management also has several business expansion plans on the cards to create more value for its shareholders.

We opine that a 25bps rate cut would not impact underlying demand significantly, given the muted impact on affordability. However, we view the rate cut positively for the near-term sentiment, given low expectations for the property sector.

Moving forward, we expect the potential downside for M-REITs from external factors to be limited, with no immediate risk of a narrowing yield spread given the monetary easing bias and their relative attractiveness amid a low-yield environment and uncertainties in the global market.

The cooling measures should lead to moderation in demand for investment property with a consolidation of prices in Melbourne and Sydney. We expect buyers’ sentiment to be dampened in the short term.

The majority of the property developers remain cautious about financial year 2016 (FY16) outlook with an average sales target growth of 5%. Matrix Concepts and Eco World Development Group Bhd are more upbeat about annual sales target growth, with 24% and 33% respectively.