BY S. PUSPADEVI

PETALING JAYA: LBS Bina Group Bhd is poised to meet its RM1.2bil full-year sales target and has the capacity to beat its peers in terms of sales and earnings growth, despite the soft property market, according to research houses.

CIMB Research in its published report said LBS had sold RM443mil worth of property in the first half of 2016 and was on track to meet its RM1.2bil full-year sales target on the back of stronger sales in the second half of the year.

“It plans to launch about RM384mil worth of property in the remaining four months of 2016, which include one block of serviced residences in BSP 21 and 157 units of landed property in Desiran Bayu,” said CIMB.

These launches should have healthy take-up rates, given the lack of supply of mass-market property in the past few years, CIMB pointed out.

CIMB said LBS’ higher work progress had enabled its first-half 2016 net profit to beat CIMB’s expectations at 59% of the full-year forecast.

On that note, it has raised its financial year 2016 (FY16) to FY18 forecast earnings per share by 2% to 9% to account for faster work progress and a higher profit margin.

That said, LBS’ strong performance year-to-date supports CIMB’s view that the developer will outperform its peers in sales and earnings growth.

CIMB has kept its “add” call and raised its target price to RM1.95 based on a 40% discount to its revalued net asset value (RNAV) after imputing the surplus value from the acquisition of 638 acres of land in Dengkil.

This land’s potential gross development value is estimated to be more than RM2bil.

Meanwhile, Public Investment Bank Bhd (PIB) has maintained its “outperform” call on LBS, with an unchanged target price of RM2.08 based on a 30% discount to its fully diluted RNAV.

The lower discount was justifiable in view of LBS’ ability to easily monetise its land bank in the current market environment, relative to its peers, noted PIB.

LBS’ second-quarter FY16 revenue of RM225.6mil and net profit of RM19.7mil were in line with PIB’s and consensus estimates.

In the first half of 2016, LBS’ net profit came in at RM35.7mil, which accounted for 45% of PIB and consensus full-year net profit estimates.

“We project subsequent quarters to be stronger, underpinned by ongoing launches,” said PIB, adding that a special dividend of two sen was declared during the quarter.

With unbilled sales of RM1.25bil now from RM1.17bil in the first quarter of FY16, PIB said LBS’ property revenue was mainly driven by its flagship Bandar Saujana Putra township and the D’Island development in Puchong.

LBS’ second-half sales could push the group to meet its RM1.2bil sales target, said PIB, adding that yeat-to-date till August, LBS had achieved new sales of RM827mil.