NST Business

KUALA LUMPUR: There are no concrete developments on Matrix Concepts Holdings Bhd's recent deal with NS Corporation, the state-owned body of Negeri Sembilan, to develop lands in Malaysia Vision Valley 2.0 (MVV 2.0), says Hong Leong Investment Bank Bhd (HLIB Research).

The bank-backed research firm said that at this juncture, the research firm understands that Matrix Concepts has not secured any lands yet, and the details of the collaboration, including the partnership structure, funding plan, execution plan, exact land location, and cost, are not available yet.

"Nonetheless, we are positive about this development as it provides better visibility of Matrix Concepts' growth strategy moving forward.

"The proposed development of an additional 1.35k acres of land with the assumption of a land depletion of 150 acres per year will provide Matrix with earnings visibility of nine years," HLIB Research said in a recent note.

HLIB Research said the new development would likely be a residential development near its home turf in the Sendayan area.

"As such, Matrix will have a home ground advantage as it is familiar with the area's demographic, dynamics, and regulations," the firm noted.

To recap, Matrix Concepts, through its wholly-owned subsidiary MCHB Development (NS) Sdn Bhd, has entered into a memorandum of understanding (MoU) with NS Corp on 28 April 2022 to collaborate and

develop certain parts of the lands in MVV 2.0, measuring approximately 1.35k acres.

MVV 2.0 is an integrated economic region

complementing the development of the Greater Kuala Lumpur district spanning 153.4k hectares covering districts of Seremban and Port Dickson, located in Negeri Sembilan.

"If MVV 2.0 project is not followed through (as a result of policy risk), we believe that residential development in the Greater Klang Valley area will still be able to capture spillover demand from Klang Valley as evidenced by Matrix Concepts' development in the Sendayan area, which in recent years have attracted more than 60 per cent of home buyers from the Klang Valley.

"The improvement in road infrastructure and connectivity to the city centre and the current work-from-anywhere trend (which allows workers to work in remote areas away from work location) will bolster the demand for housing developments in the Greater Klang Valley area," HLIB Research said.

The research firm maintains a Buy call for Matrix Concepts with an unchanged target price of RM2.54.

"We continue to like Matrix Concepts as it is well-positioned to ride on affordable housing within its thriving townships with cheap land cost and sustained property sales.

"This is supported by an attractive dividend yield of 6.1-7.3 per cent for FY22-24, being one of the highest in the sector," it said.