Major project: A scale model of LBS Bina’s Alam Perdana project. The township in Ijok, Selangor, is being built jointly with the Selangor state government.

PETALING JAYA: Shares of LBS Bina Group Bhd came under selling pressure last week, as investors took profit after the stock surged to a record high on projections that it is expecting to achieve higher sales in 2018.

The stock hit a record high of RM2.47 on Jan 5, on news that the property developer was targeting a 26% year-on-year (y-o-y) growth in sales to RM1.8bil this year.

The shares plunged more than 3% over the course of five days last week.

At a briefing on Jan 4, LBS Bina group managing director Tan Sri Lim Hock San said the sales projection was underpinned by the launch of a number of affordable housing and landed projects with a total gross development value (GDV) of RM2.19bil.

While seemingly daunting, Public Investment Bank Research (PIB Research) believes this can be achieved, considering that about RM1.4bil worth of ongoing and relatively sellable projects are being carried over into the new year from the previous year.

“Unbilled sales are at a healthy RM1.52bil, underpinning earnings visibility for the next two years at the very least. With a remaining land bank of 3,806 acres carrying an estimated RM29bil in GDV, the LBS Bina Group will remain in the game for a long time yet.”

The research house pointed out that a total of 10 projects carrying a total GDV of RM2.33bil were launched in 2017, with sales of RM1.43bil achieved.

About 69% (RM982mil) of the sales were done in the Klang Valley, with 58% of the properties priced below RM500,000 per unit.

For 2018, eight new projects worth RM2.19bil will be launched, with primary concentration in the Klang Valley.

“Of the total 5,255 units on offer throughout the year, close to 40% worth RM884mil will be landed properties, cementing its entrenched position as a leading township developer in the domestic mass-market affordable housing segment. Price ranges are mostly sub-RM500,000.”

Hong Leong Investment Bank Research, which has a “neutral” call on the local property sector, said in a recent report that the segment would be driven by the launch of more affordable homes.

“Affordable properties in proper planned townships and strategic locations will continue to see sustained demand,” it said.

AmInvestment Bank Research, meanwhile, believes that the property market has continued to respond favourably towards selected township launches, especially for landed properties such as linked houses.

“Given that matured areas such as Petaling Jaya have inflated prices for landed properties, the move away from the city to areas such as Rawang and Puncak Alam has allowed developers to price their projects more attractively.

“We also find that developers are operating more wisely by introducing newer launches at a slower pace and in smaller number of units, which help generate momentum as well as a better gauge of demand in the market.”

The research house noted that Alam Perdana, LBS Bina’s upcoming township in Ijok, Selangor, is being built jointly with the Selangor state government.

“It will see up to 10 parcels of land developed for the affordable housing initiative ‘Rumah Selangorku’ and the 1Malaysia Civil Servants Housing Programme.”

LBS Bina has launched its first property project for this year – a planned RM954.7mil condominium development in Bukit Jalil.

For its third quarter ended Sept 30, 2017, LBS Bina’s earnings rose 26% to RM25.9mil compared with RM20.5mil a year ago.

Revenue climbed to RM351mil from RM245mil previously.

For the nine-month period, the company’s net profit grew to RM79.1mil from RM57.5mil, while revenue increased to RM955mil from RM671mil a year earlier.