MORNING CALL: 22/11/23

Phillip Research says Lagenda Properties’ 9M23 results missed both the research firm’s and consensus expectations

Transcript

00:00 In focus this Wednesday morning is Legenda Properties.

00:05 Philip Research says the stock remains a buy, though it trimmed its target price to

00:09 RM1.51 from RM1.55.

00:12 The counter lost trader at RM1.20.

00:15 So according to Philip Research, Legenda's nine-month 23-quarter net profit of RM106.3

00:21 million made up just 57% of its full-year estimates and 62% of consensus expectations.

00:29 The deviation was mainly attributable to the slower-than-expected progress billings from

00:34 the Legenda Telok Intan and Kedah Daruaman Legenda townships due to delay caused by its

00:39 transition to the industrialised building systems.

00:42 There was sequential improvement though in third-quarter revenue of RM217.9 million,

00:48 suggesting that the construction progress across the affected townships is showing modest

00:53 recovery.

00:54 During this quarter, Legenda clinched twin record highs, confirmed sales of RM289 million

01:00 and unbuilt sales of RM855.1 million.

01:04 Philip Research lowering its 2023-25 earnings forecast by 12% to 24% after factoring in

01:11 the slower-than-expected construction progress for the affected townships.

01:16 It expects Legenda to show modest earnings rebound of 40% year-on-year in 2024.

01:21 Supported by the company's record high unbuilt sales and ongoing expansion in Johor and Kedah.

01:27 So what's the consensus?

01:28 According to Bloomberg data, there are in total three buy calls on Legenda, with target

01:33 prices averaging out to RM1.58.

01:36 The stock settled yesterday at RM1.20, so that implies a potential return of 31.7%.

01:43 [MUSIC]