Glomac Berhad (GLOMAC) reported robust property sales of RM218 million in 4QFY24, contributing to a total of RM360 million for FY24. The sales were predominantly driven by strong demand for landed properties at Lakeside Residences and Suajana KLIA, highlighting continued market resilience in this segment, as cited by MIDF Investment Bank (MIDF) in their report today (July 5, Friday).
The House maintains a NEUTRAL rating on GLOMAC following a recent meeting with its management team. Despite the solid performance of landed properties, sales at Loop City Residences were sluggish, achieving only a 20% take-up rate due to competitive pressures in Puchong's high-rise condominium market. The bank anticipates a potential turnaround once take-up rates improve, projecting meaningful contributions to earnings from FY26 onward.
GLOMAC aims to sustain sales momentum with planned launches in FY25, expected to generate a Gross Development Value (GDV) of RM425 million across strategic locations including Puchong, Suajana Utama, and Saujana KLIA. This proactive approach underscores the company's strategy to capitalise on the strong demand for landed houses amidst prevailing market dynamics.
Despite challenges in the high-rise segment, GLOMAC's focus on landed properties positions it well to leverage ongoing market demand and stabilise revenue streams. Investors assessing the company should consider its strategic initiatives and competitive positioning within the property development sector.
MIDF maintains its NEUTRAL recommendation on GLOMAC with an unchanged target price of RM0.43. Based on an 80% discount to Revalued Net Asset Value (RNAV), this valuation reflects current market conditions and the bank's outlook on GLOMAC's earnings potential. Investors are encouraged to carefully evaluate the company's performance and market conditions before making investment decisions.