MATRIX (5236) : Special CNY Ang Pow

MATRIX (5236) : Special CNY Ang Pow

Matrix FY14Q4 Financial Result

MATRIX	FY14Q4	FY14Q3	FY14Q2	FY14Q1	FY13Q4
Revenue	151.0	148.8	163.7	134.7	144.3
Gross Profit	97.5	83.8	74.6	67.8	78.5
Gross%	64.6	56.3	45.6	50.3	54.4
PBT	73.8	58.5	58.6	54.0	56.4
PBT%	48.8	39.3	35.8	40.1	39.1
PAT	56.5	45.1	42.4	38.6	40.7
Prop Rev	150.5	148.8
Prop OP	77.6	61.2
Edu Rev	0.5	0.0
Edu OP	-2.9	-1.9
Club Rev	0.0
Club OP	-0.4
Total Equity	686.0	643.5	613.5	582.0	552.4
Total Assets	996.2	1000.9	944.5	964.5	900.5
Trade Receivables	79.5	174.9	160.0	144.3	140.8
Prop dev cost	566.2	556.3	524.4	523.5	443.8
Inventories	2.1	0.7	0.7	0.7	1.6
Cash -OD	58.7	23.3	29.4	96.0	83.8
Total Liabilities	310.2	357.4	331.1	382.5	348.1
Trade Payables	195.7	274.7	253.7	299.3	245.7
ST Borrowings	42.3	23.6	32.2	34.4	35.5
LT Borrowings	35.8	21.4	1.5	13.2	15.3
Net Cash Flow	-10.1	-45.5	-39.4	27.2	53.4
Operation	130.0	65.3	68.8	85.6	39.7
Investment	-93.2	-63.9	-55.7	-29.4	-69.2
Financing	-46.9	-46.9	-52.5	-29.0	82.9
Dividend paid	77.6	60.5	45.3	30.1	46.2
EPS	12.40	10.50	14.00	12.80	13.50
NAS	1.50	1.41	2.02	1.92	1.83
D/E Ratio	0.03	0.03	0.01	Net cash	Net cash

Matrix has just released a magnificent FY14Q4 results yesterday. Though revenue inches up by a mere 1.5% QoQ, PATAMI jumps 25% to a record high of RM56.5mil since listed.

This is mainly contributed by record high gross margin at 64.6%. However, there is no mention about how much of industrial land sales with higher margin is recognized in current quarter.

For the whole FY14, Matrix's revenue improves 4.3% to RM598.3mil from RM573.5mil in FY13, whereas PATAMI rises 20.4% from RM151.6mil to RM182.6mil.

Industrial land sales make up 24% (RM144.7mil) of the whole FY14 revenue.

New property sales in FY14Q4 reaches RM182mil, up from RM158.5mil in previous quarter. However, total new property sales (including new land sales) drops to RM630.2mil in full FY14 from RM788mil in FY13.

Unbilled sales manage to increase slightly this quarter to RM429.3mil from RM410.5mil in 3rd quarter of FY14.

Matrix International School and Matrix Private School have started operation in Sep14 and Jan15 respectively. Its education segment is still in red with an operating loss of RM2.9mil in this quarter and accumulated loss of RM4.8mil so far.

The schools have 320 students enrollment as at Dec14 and the management targets 800 students by the end of 2015.

The inclusion of Matrix Private School and d'Tempat clubhouse in the first quarter of FY15 might add a bit to its revenue in FY15Q1 but loss in early operation is still expected.

Nevertheless, Matrix global schools and clubhouse will add to the appeal of its township Bandar Sri Sendayan.

       d'Tempat Clubhouse

Matrix will launch Hijayu 2 (phase 1) and Sendayan Merchant Square Shop Offices (phase 1) in the first 3 months of 2015. I believe that the commercial properties will sell like hot cakes.

It targets to launch RM1bil worth of properties in FY2015.

At the same time, Matrix declared its 4th interim rim dividend of 5.25sen, together with its first ever special dividend of 1.25sen.

Matrix pays a total of 17.33sen (adjusted to 1:2 bonus issue for 1st interim dividend) for its FY14 representing RM77.2mil or 42.3% payout from its FY14 PATAMI.

Dividend yield will be 6% at share price of RM2.90.

Matrix's actual EPS for FY14 reaches 39.9sen, its PE ratio is at 7.3x.

I will give it a fair PE of 8 in current challenging property market so my target price for Matrix will be RM3.20.

This target price will be lower than my previous TP of RM3.50 base on PE of 10x. It just serve as a reference for myself and actually not that important if you plan to hold the shares for long term.

I will continue to hold Matrix's shares and continue to monitor its FY15 financial results.

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