Hunza Properties Bhd is expected to deliver promising results in the future, thanks to its projects in the luxury sector amid the property boom in Penang, says Kenanga Investment Bank Bhd.
“We expect quicker take-up rates for Infiniti and Gurney Paragon than for typical Penang properties, given the iconic appeal of both projects,” Kenanga said in a report, noting that Infiniti and Gurney Paragon had recorded 22% take-up rates each since their launch in mid-2007.
In addition, there would be more profit recognition and accelerated sales at Ailila in Tanjung Bungah, Penang and Mutiara Seputeh, Kuala Lumpur as these projects neared completion in the third quarter of its financial year ending June 30, 2008 (FY08), it said.
For the first quarter ended Sept 30, Hunza Properties recorded a 62% increase in pre-tax profit to RM18mil, driven mainly by higher profit recognition for Alila and Mutiara Seputeh, which had 85% and 70% take-up rates respectively.
Kenanga said while the RM12mil net profit was below its expectations and accounted for 19% of its FY08 forecast of RM62mil, first-half results “tend to be softer than” the second. It forecast FY09 net profit of RM78mil.
OSK Research Sdn Bhd concurred that Hunza Properties was coming largely in line with its full-year projection, with a year-on-year growth of 86.3% and 66.8% in turnover and net profit respectively in the first quarter.
OSK had forecast Hunza's FY08 turnover and net profit at RM270mil and RM51.3mil respectively.
“With more cash flowing in from its property development projects, Hunza Properties net gearing position has improved further to 0.57 time in the first quarter from 0.67 time in the fourth.
“Hunza Properties has an unbilled sales of RM194mil from its development projects of Alila, phase one of Gurney Paragon and Infiniti, and semi-detached units and bungalows in Mutiara Seputeh,” it added.
CIMB Research said: “We believe the stock should outperform given the upside to our conservative sales and margin assumptions, the entry of reputable partners for Gurney Paragon and the landbank acquisitions,” it said.
Hunza Properties closed at RM2.69 on volume of 298,700 shares.
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