Apex Securities initiates comprehensive coverage on Lagenda Properties Bhd, setting a fair value of RM1.52 for the company’s shares, while highlighting its strategic advantages.
PETALING JAYA, 22 Aug 2023 – Apex Securities has announced the initiation of its coverage on Lagenda Properties Bhd at RM1.24, setting a fair value of RM1.52 for the company.
In a recent communication, Apex underscored Lagenda’s impressive achievement of maintaining a profit margin exceeding 20%, despite exclusively offering affordable properties within the real estate market. The research entity attributed this success to Lagenda’s strategic advantages over its competitors.
These advantages include the acquisition of sizable plots of cost-effective land in non-urban regions, internal construction capabilities, strategic partnerships, and the attainment of economies of scale through the development of over 10,000 units in their key townships. These factors differentiate Lagenda from its peers, according to the research.
Apex projected that Lagenda’s revenue will continue to expand, anticipating a compound annual growth rate (CAGR) of 15.8%. This growth follows a consistent upward trajectory in earnings, which have risen from RM95.9 million in financial year 2019 (FY2019) to RM178.1 million in FY2022.
The research firm emphasized that the fair value of RM1.52 was determined based on a 20% discount applied to Lagenda’s estimated revalued net asset value (RNAV), considering a projected moderate increase in earnings influenced by higher interest costs.
Lagenda specializes in the development of affordable landed properties and integrated townships, catering to households within the B40 and M40 income segments in Malaysia.
Regarding the property market, Apex noted a scarcity of affordable housing supply, despite substantial demand, largely attributed to limited transportation access and reduced interest in high-rise units. Simultaneously, a significant number of unsold units are present in other property segments.
However, Apex Securities observed a trend toward enhancing affordability within the property market. This shift corresponds with a deteriorating price-to-income ratio, reflecting rising property prices and declining incomes.
As of 22 August 12:02 pm, Lagenda’s share price remained steady at RM1.24, contributing to a market capitalization of RM1.04 billion.
