KUALA LUMPUR: Glomac Bhd says it should benefit from potential heightened activities in Johor with the proposed introduction of a special financial zone in Forest City, and a possible revival of the Kuala Lumpur-Singapore high speed rail project.
The company is bullish given its existing presence in Johor through the Sri Saujana and Saujana Jaya township developments, which have a combined landbank totaling 238 acres and a total potential estimated gross development value (GDV) of RM800 million.
Overall, Glomac commands a robust portfolio of prime and strategic landbanks for development with an estimated GDV of close to RM8 billion, the company said in a statement following its shareholders meeting recently.
The company is gearing up to introduce new projects worth about RM700 million in the current fiscal year.
Among the new launches is the first phase of the Loop City Puchong integrated residential project, with a total estimated gross development value (GDV) of RM1.57 billion.
The first phase, which has a GDV of RM338 million, consists of 980 units of small office/home office (SoHo) and serviced apartments, available in three sizes - 450 sq ft, 550 sq ft, and 750 sq ft. The indicative average selling price per unit is RM320,000.
AmInvestment is positive about the sales prospects for Loop City Puchong given its affordable pricing and proximity to the company's existing Lakeside Residences project, which has already fully sold all residential units.
This is supported by Glomac's registration of interest in the project, which garnered a strong response prior to the official launch, it said in a note recently.
The bank maintains a "Buy: recommendation on Glomac with an unchanged fair value (FV) of 45 sen based on a discount to RNAV of 45 per cent, and a neutral ESG rating of three-star.
It also maintains its earnings forecast following its recent meeting with Glomac's management.
Some of the key takeaways are that despite a weaker performance in the first quarter of 2024 (1QFY24),
AmInvestment expects Glomac's revenue and earnings to catch up in 2HFY24 with the easing of labour shortages, coupled with management's stronger FY24F property sales target (mire than 30 per cent year-on-year growth).
Furthermore, it projects that the unbilled sales of RM60 million from Plaza Kelana Jaya and RM147 million from 121 Residence will be largely recognised over the remaining quarters of FY24F.
In the fiscal year 2023 (FY23), Glomac achieved a pre-tax profit of RM50.5 million and a profit attributable to the owners of the company (PATMI) of RM31.5 million.
This was achieved on the back of revenue of RM341.0 million, a 31 per cent growth compared to RM259.5 million reported in FY22.
The stronger growth was mainly driven by steady construction activities from Glomac's ongoing development projects, including current phases at its Saujana Perdana township in Sungai Buloh, Plaza@Kelana Jaya, and 121 Residences in Petaling Jaya.
The company delivered robust sales, surging 89 per cent to RM302 million for FY2023, which it attributed to its strong product offerings as well as successful sales initiatives.
New sales were mainly supported by its highly successful residential townships at Saujana Perdana, Saujana Utama 5, and Saujana KLIA, as well as Plaza@Kelana Jaya and 121 Residences.