Tambun Indah (TILB) has seen a promising boost in its stock outlook, as analysts upgrade their recommendations based on strong sales performance. The company's recent results have outpaced expectations, leading to an upgrade to a BUY rating from a previous neutral stance. The target price has been set at RM1.20, reflecting a 23% upside potential from the current price of RM0.98. This positive outlook is supported by Tambun Indah's solid sales performance, which exceeded initial forecasts.

Analysts from various stock broking houses have maintained a BUY recommendation on Tambun Indah, reflecting their confidence in the company's growth prospects and the potential upside in its stock price.

In its 2Q24 results, Tambun Indah reported a 17% year-on-year increase in revenue, driven primarily by its Botanic Villa project, which was launched late last year. Despite a 11% quarter-on-quarter decline, the company's pre-tax profit and core profit both more than doubled compared to the previous year. This growth is particularly notable given the lower base from the previous year when the company had accounted for a provision related to a low-cost housing project.

The company plans to focus on its existing major projects, including Botanic Villa and Dahlia Garden, which have shown strong take-up rates. However, the launch of new projects, such as a freehold landed project in Bukit Mertajam, has been delayed until next year. Additionally, a new high-rise development, Aralia Park, is set to be launched in 2025, with an estimated gross development value of RM148 million.

For the first half of 2024, Tambun Indah's locked-in property sales reached RM132.6 million, putting it on track to potentially surpass its internal sales target of RM150 million for the year. Analysts maintain their earnings forecasts, with an expectation that Tambun Indah will exceed its sales targets. The company's 2Q24 net profit of RM13.6 million, while lower compared to the previous year and the previous quarter, has been bolstered by an improvement in the EBIT margin.

The company's unbilled sales stand at RM126 million, and its average take-up rate for projects has improved. With a clean balance sheet and strong demand for its properties, particularly in the Batu Kawan area, Tambun Indah remains an attractive investment. The revised target price of RM1.20 is based on a 60% discount to the revised net asset value (RNAV), reflecting the company's strong growth momentum and potential for future development.

Source: RHB, Maybank
Title: Charts Strong Sales Growth; U/G To BUY, Earnings on track