KUALA LUMPUR: CIMB Equities Research said although Hua Yang is a very small property stock in terms of market cap, it has big ambitions and plans to expand its profits several fold over the next three to five years.
It said on Tuesday, March 29 that should Hua Yang manage to deliver its targets of RM500 million to RM600 million in turnover and RM75 million to RM90 million net profit, P/E would plunge to below 2.0 times.
CIMB Equities Research said the high targets are not unrealistic as the group has landbank with RM2.23 billion GDV potential and is always on the lookout for more. Also, it has exceeded its FY3/11 sales target of RM300m and including bookings, has unbilled sales of over RM400 million, nearly 4x FY10's turnover.
'Using a blend of 40% discount to its RM4.30 RNAV in view of its small size and illiquid shares and a similar discount to our 14.5x FY12 target market P/E, we arrive at a value of RM2.76, which implies 100% upside,' it said.
It said on Tuesday, March 29 that should Hua Yang manage to deliver its targets of RM500 million to RM600 million in turnover and RM75 million to RM90 million net profit, P/E would plunge to below 2.0 times.
CIMB Equities Research said the high targets are not unrealistic as the group has landbank with RM2.23 billion GDV potential and is always on the lookout for more. Also, it has exceeded its FY3/11 sales target of RM300m and including bookings, has unbilled sales of over RM400 million, nearly 4x FY10's turnover.
'Using a blend of 40% discount to its RM4.30 RNAV in view of its small size and illiquid shares and a similar discount to our 14.5x FY12 target market P/E, we arrive at a value of RM2.76, which implies 100% upside,' it said.
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