Tambun: Back to Net Cash

Tambun FY14Q3 Financial Result

TAMBUN	FY14Q2	FY14Q2	FY14Q1	FY13Q4	FY13Q3	FY13Q2
Revenue	116.8	128.0	112.0	118.4	97.1	82.6
PBT	34.8	33.1	35.3	36.3	31.2	26.3
PBT%	29.8	25.9	31.5	30.7	32.1	31.8
PAT	25.5	25.4	25.3	22.1	17.2	14.0
Total Equity	377.9	351.0	336.0	310.1	273.9	243.1
Total Assets	636.8	676.1	596.9	496.9	510.2	475.0
Trade Receivables	117.0	106.8	99.1	86.6	83.8	79.8
Prop dev cost	83.9	57.2	96.4	125.1	129.6	131.5
Inventories	0.3	0.3	0.3	0.3	0.0	0.0
Cash	151.1	194.4	142.8	125.9	141.9	117.2
Total Liabilities	256.6	323.0	258.7	183.3	185.0	185.9
Trade Payables	93.1	102.0	93.1	81.1	74.5	69.7
ST Borrowings	13.8	38.3	39.5	24.8	26.4	26.7
LT Borrowings	133.2	164.7	116.6	73.3	73.8	80.3
Net Cash Flow	37.3	80.6	29.0	24.3	52.5	22.9
Operation	3.0	-23.1	-23.0	57.9	32.5	2.0
Investment	8.5	2.4	4.1	-21.4	-4.5	-4.2
Financing	25.8	101.3	47.9	-12.2	24.5	25.0
EPS	6.22	6.34	6.41	6.14	5.22	4.46
NAS	0.92	0.86	0.85	0.79	0.82	0.76
D/E Ratio	Net cash	0.02	0.04	Net cash	Net cash	Net cash

It's another RM0.1mil higher PATAMI for 2 quarters in a row for Tambun.

Nevertheless, revenue falls 8.8% due to lack of new launches in FY14Q3.

Tambun has launched Pearl Harmoni, Camellia Park, Permai Residence & Bukit Residence in the first half of FY14. These 4 projects achieve average 77% take-up rate so far.

Q3 launch has been delayed as it is reported that new projects are still pending approval. I believe that those projects are Rain Tree Park 1 & Pearl Avenue 2.

As a result, new sales in Q3 falls to RM74mil, down from RM149mil in Q2 and RM125mil in Q1, Total 9 months sales are RM348mil compared to RM500mil in full FY13.

Pearl Avenue 2 has been launched in Q4 with take up rate of 70% so far, while the show houses of Rain Tree Park have been opened for public recently.

Anyway, the stickers game has already started for Rain Tree Park 1 since months ago.

Unbilled sales stand at RM457.3mil at the end of FY14Q3, slightly lower than RM493mil 3 months ago.

Overall take-up rate for its on-going projects reaches 87%, which is excellent and better than 81.2% announced last quarter.

       Pearl Avenue 1 - almost completed

Total borrowings have been reduced by RM56mil in Q3. This enables Tambun to get back into net cash position.

Hopefully it will "diversify" away from its Pearl City by acquiring another huge land for township development elsewhere.

Meanwhile, there is some construction activity going on next to its Pearl City sales office at the moment. I guess it is working on the show unit of its upcoming serviced apartment Avenue Garden.

The construction of GEMS International School is running fast while we can see some ground floor structures for Pearl City Mall now.

       GEMS International School campus

       Pearl City Mall construction progress

Tambun declares a first interim dividend of 3sen for FY14 which is 50% higher than 2sen in the corresponding period last year. Its total dividend might reach 10sen for the whole FY14 base on minimum 40% dividend payout ratio.

As the total paid-up shares have increased due to ESOS and warrant conversion, I will revise my own target price slightly downward to RM2.42, with target PATAMI unchanged at RM100mil for FY14.

Going forward, new landbank acquisition will be key to Tambun's growth.