1. Record sales of RM2.16B FY13; Strong earning with RM2.18B unbilled sales.
2. New launches RM3.2B FY14, targeting sales >RM2B
3. Focus on products/locations where demand remains strong. (40% in landed residential products; mainly in KL/Penang)
4. Manageable net gearing of 55%. Continue with de-gearing activities.
5. Well-positioned to weather short-term market consolidation, given strong unbilled sales, premier branding, strategic landbank and innovative suite of products.
By looking at the 5th point, I can tell that the management is not satisfy with the current share price despite the company has very good sales, branding, landbank and products. Supported by point 1 to 4, I am optimistic there is a huge upside for the share price.
The only cons of TROP is high debt.
However the company is doing their best to bring down the gearing by disposing lands. The most recent one is the disposal of 308.72 acres of land in Kota Kemuning for cash consideration of ~RM470millions and bags ~RM170millions profit (net of taxable) and this is estimated to be completed in Q2FY14.
Apart from this, there are few parcel of lands that have singed SPA but pending for completions. Refer below:
Green - Disposed in FY13 for RM339m
Red - SPA signed, pending completion
Beside de-gearing, the company is able to unlock its value thru land disposal as well. The lands are bought with cheap price and resell with higher price. Up to date the company has landbank of 1959 acres with potential GDV of RM72.2B.
With the strong branding, landbanks, and great sales/unbilled sales, I'm accumulating TROP and set a TP of at least RM 2 for short-mid term.
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