[The Edge] Tambun Indah Land among top losers after 4Q net profit halved

By Lam Juan Wyn

KUALA LUMPUR (Feb 14): Tambun Indah Land Bhd was the second biggest loser on Bursa Malaysia in Tuesday (Feb 14) morning trade, shedding as much as 11 sen or 11.58%, after it announced that its net profit for the fourth quarter ended Dec 31, 2022 (4QFY2022) fell by 57.44% from a year ago.

At 9.50am, the counter had pared some losses to settle 10 sen or 10.53% lower at 85 sen a share, from 95 sen on Monday.

The property developer’s net profit fell 57.44% to RM12.15 million for 4QFY2022, from RM28.55 million a year ago.

Earnings per share also declined to 2.76 sen from 6.56 sen for 4QFY2021, according to its filing with Bursa Malaysia on Monday.

Revenue likewise declined by 49.84% to RM53.93 million, from RM107.52 million previously, due to lower net property sales and fewer ongoing projects, coupled with the group’s cautious approach to new property launches given the overall market condition.

“Revenue was mainly contributed by residential property developments in Pearl City, Simpang Ampat, which accounted for approximately 96.9% of total revenue in the segment for the current quarter under review,” it said.

Meanwhile, net profit for the financial year ended Dec 31, 2022 (FY2022) dipped 0.76% to RM61.16 million from RM61.63 million for FY2021, while revenue slipped by 11.1% to RM227.49 million from RM255.88 million, offset by lower cost of sales.

“The outlook for the property market in 2023 is expected to remain affected by a rising interest rate environment in the midst of a global inflationary setting, coupled with an escalation in construction cost,” said the group.

“Based on the foregoing, the group expects to achieve a moderate performance for FY2023.”

Maybank Investment Bank analyst Wong Wei Sum in a note on Tuesday lowered her FY2023 earnings forecast for Tambun Indah Land by 4%, but increased her FY2024 forecast by 14%, after factoring in actual results for 2022 and a sales assumption of RM150 million for FY2023.

“Despite the downgrade in stock rating, we continue to like [Tambun Indah Land] for its prudent management and clean balance sheet, as well as its implied dividend yield (estimated for FY2023) of 5.3%. [Tambun Indah Land] is a good proxy for the booming Batu Kawan area,” she wrote.