LBS Bina Group Bhd revealed that as of May 31, 2020 the company has owned undeveloped land bank totalled at 3,610 acres with a total gross development value of RM33 bil.
The undeveloped lands are strategically located at Klang Valley, Pahang, Perak, Johor and Sabah.
In a recent statement, LBS said that this land bank is projected to keep the company busy for 10 to 15 years.
“We will continue to look at attractive land-banking acquisitions as and when opportunities arise,” said LBS group managing director Tan Sri Lim Hock San.
LBS has recorded a total unbilled sales at RM1.805 bil as of May 29, 2020 which provides strong earnings’ visibility for LBS.
The company also has secured RM317 mil sales and RM305 mil bookings as of June 29, 2020.
Recently the group has KITA Ria, a serviced apartment at KITA @ Cybersouth township in Dengkil and this project has garnered strong take-up rate, with its first block fully booked.
To continue catering to market demand, LBS is planning to launch several projects with a combined estimated GDV of RM1 bil in the next few months.
These new launches include KITA Mekar single-storey, double-storey houses and townhouses, in KITA @ Cybersouth.
New projects in LBS Alam Perdana township in Bandar Puncak Alam include Ritma Perdana townhouses and terrace houses as well as the second block of Melodi Perdana apartments. The bulk of the upcoming launches is derived from the affordable segment below RM500,000.
“Affordability remains the key concern for homebuyers, and therefore, we will continue to maintain our strategy of building homes to meet this market demand. LBS’ properties and townships were designed based on the three main pillars of affordability, connectivity and community,” elaborated Tan Sri Lim Hock San.
In the first quarter ended March 31, 2020, LBS recorded a revenue of RM299 mil and profit before tax (PBT) of RM24 mil. The group attributed the revenue and PBT to strong take-up rates for its townships and affordable housing developments.
The main revenue and PBT contribution came from their key townships and projects such as LBS Alam Perdana, KITA @ Cybersouth, Bandar Saujana Putra, Cameron Golden Hills and LBS SkyLake Residence.
LBS has 16 ongoing projects with an estimated Gross Development Value of RM4 billion.
Meanwhile, CGS-CIMB Equities Research remains positive on LBS given the potential value arising from its development at China Zhuhai International Circuit and anticipated higher FY21- 22F earnings.
“LBS is poised to benefit from the Malaysian government’s focus on affordable housing as the majority of its products are priced below RM500,000, ” it said in a research note recently.
However, the key downside risks are a deterioration in property market sentiment and lower-than-expected sales.
The research house also said that said LBS’s 1Q20 core net profit was below expectations, at 14% of its and 13% of Bloomberg consensus full-year estimates.
The underperformance was due to lower-than-expected revenue recognition from its ongoing projects and external construction works, impacted by the movement control order (MCO).
LBS Bina’s 1Q20 core earnings declined 48% yoy due to weaker sales (-8% yoy), lower gross margin (-2% pts yoy) and higher effective tax rate. As at end-March 2020, unbilled sales were higher at RM1.77 bil vs RM1.64 bil in March 2019 due to steady sales momentum in 2019.
It said the 1Q20 new property sales came in lower at RM133 mil vs 1Q19’s RM362 mil, mainly due to the lack of new launches, absence of Home Ownership Campaign (HOC) and impact from the Movement Control Order (MCO).
CGS-CIMB Research said due to the weaker-than-expected revenue recognition due to the MCO impact; it cut our FY20-22F EPS by 5-24%.
“Our TP of 47 sen is still based on 0.5 times FY21F price-to-book value (-1 standard deviation from its three-year mean P/BV), ” it said.