[ad_1]
KUALA LUMPUR (Dec 29): AmInvestment Bank Research has maintained its “neutral” rating on the real estate sector, saying that circumstances will remain challenging for the next 12 months.
In an industry report today, AmInvestment analyst Thong Pak Leng said that even with most developers having achieved new sales targets, sales fell by around 22% in the cumulative first nine months of 2020 (9M20) , compared to the previous year, due to a lack of brightness. market amid the Covid-19 pandemic.
Instead, developers were more aggressive in compensating for unsold units by offering discounts with the inventory level in a downward trend, Thong said.
AmInvestment said that in certain segments, developers with overseas exposure will do better in the medium term, especially in China and Singapore.
He said that Sunway Bhd and IOI Properties Group Bhd (IOIPG) are well positioned in this area and that their launches are generally well received locally and abroad.
Landbanking activities are expected, especially in good locations near Kuala Lumpur city center, major highways and MRT / LRT lines, he said.
AmInvestment said the affordable segment is anticipated to perform well, with resilient demand coming from young professionals and families due to continued urbanization. In the last two to three years, many developers have moved from high-end products to affordable products.
The research house said that Mah Sing Group Bhd had started building residential properties below RM600,000 per unit for more than three years.
He highlighted that the company implemented four key projects in the last 12 months with starting prices below RM500,000 per unit.
Meanwhile, he said that Scientex Bhd had several projects largely in the southern region of Peninsular Malaysia, offering residential properties (landed and high-rise) at RM200,000 to RM350,000 each.
He added that Crest Builder Holdings Bhd plans to build residential apartments in Klang with starting prices below RM300,000 per unit, scheduled to launch in the first half of 2021 (1H21).
“Because consumer confidence is still weak, most developers remain cautious and are still evaluating the economic situation before deciding to continue or postpone future releases. With today’s consumer spending largely focused on necessities, expensive items like property will take a back seat.
“On a positive note, the reintroduction of the Home Ownership Campaign and full exemptions from stamp duty for both the transfer instrument and the loan agreement for the purchase of property worth up to RM500,000. [a unit] it can generate buying interest, ”Thong said.
AmInvestment’s best options:
- Sunway (“buy”; fair value [FV]: RM1.93), given that its property launches have been generally well received, due to its good locations and diversified income base;
- Scientex (“buy”; FV: RM12.69) due to its impressive take-up rates and superior profit margins attributed to its correct focus on predominantly secondary suburban affordable residential units; and
- Mah Sing (FV: RM1.50), supported by strong acceptance rates for its recent launches and upcoming rubber glove business.
Meanwhile, AmInvestment lowered its rating from IOIPG (FV: RM1.83) to “hold” as its share price had reached the research house’s FV.
[ad_2]
