HUAYANG (5062) HUA YANG BHD
KUALA LUMPUR: RHB Research has maintained its Hua Yang with a target price of RM2.74, adding that its price per earnings valuation is undemanding, at about six time and dividend yield is attractive at 5%-6%.
In a note on Monday, RHB said it believed that affordable housing players with units priced RM500,000 and below would continue to fare better than its higher-end peers under the current market conditions.
Hua Yang’s management said in a briefing that it will continue to focus on landbanking activities in 2HFY15 (Mar), with the Penang mainland and Kota Kinabalu as potential new target markets, RHB said.
"Interestingly, the company expects some buyers to hold off the purchase of new homes until after the GST is implemented. Nonetheless, it is still targeting RM1.1bil of new launches for FY15," it added.
RHB sad Hua Yang will continue to guide for more landbanking activities over the next six months and targets to replenish between RM500mil and RM1bil in GDV.
"While it will still be looking at landbank within its current markets of Klang Valley, Johor and Perak, the company's current priority would be to penetrate into new markets. Thus far, it has identified the Penang mainland and Kota Kinabalu, Sabah, as possible new targets.
"The affordable housing segment remains the key focus in these new markets, and we expect it to target growing its landbank in secondary towns to maintain its 25%-30% gross margin," it said.
Unlike the general market’s expectation of consumers frontloading bigticket items ahead of the GST implementation, Hua Yang’s management believes that some buyers could hold off the purchase of properties until after the tax is implemented in Apr 2015.
"It thinks that buyer sentiment will likely be affected due to the uncertainties over the change in property prices post GST.
"Nonetheless, we believe that its new sales target of RM500mil-RM600mil is still achievable on the back of new launches worth RM1.1bil that have been planned for the year (including the last phase of its flagship project, One South)," it noted.
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