50 sen fair value for Avaland

NST Fri, Mar 15, 2024 08:16am - 2 months View Original


KUALA LUMPUR: Financial services firm PhillipCapital anticipates that Avaland Bhd's income will rise steadily each year by roughly 29 per cent between 2023 and 2025.

Strong sales, which came to RM863 million, a 1.4-fold increase in revenue over 2023, are expected to fuel this growth trajectory, it said.

"Sales are expected to remain strong in 2024 due to new projects worth RM1.4 billion, including Amika Residences (RM452 million), Anja Bangi (RM563 million), and Aetas Seputeh (RM365 million).

"Management aims for at least half of these projects to be sold, which would generate around RM700 million in sales," it said.

The company disclosed that Avaland is actively seeking additional land in the Klang Valley to sustain earnings growth beyond 2025.

"In the long run, we anticipate Avaland will continue launching projects worth RM1.4 billion each year," it added.

Furthermore, Avaland achieved its highest revenue since 2018, reaching RM608 million, coupled with a core net profit of RM63 million in 2023, attributed to advancements in construction projects.

PhillipCapital highlighted that Avaland reduced its overall borrowings from AyalaLand by 52 percent compared to the previous year. This reduction has led to significant savings in finance expenses, positively impacting the company's profitability.

The firm values Avaland at 50 sen per share, discounted by 25 percent from its net asset value (RNAV).

It said that this discount aligns with the market norm for small to mid-sized property companies

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