Tuesday, 11 August 2015

Matrix: A Little Surprise!

Matrix Concepts FY15Q2 Financial Result

Revenue 120.4 317.6 151.0 148.8 163.7
Gross Profit 63.0 187.1 97.5 83.8 74.6
Gross% 52.3 58.9 64.6 56.3 45.6
PBT 41.4 155.4 73.8 58.5 58.6
PBT% 34.4 48.9 48.8 39.3 35.8
PAT 29.9 115.4 56.5 45.1 42.4

Prop Rev 117.1 315.5 150.5 148.8
Prop OP 45.2 158.4 77.6 61.2
Edu Rev 1.2 1.4 0.5 0.0
Edu OP -2.1 -1.8 -2.9 -1.9
Club Rev 2.1 0.8 0.0 0.0
Club OP -0.2 -0.6 -0.4 -0.4

Total Equity 774.2 758.3 686.0 643.5 613.5
Total Assets 1129.6 1154.6 996.2 1000.9 944.5
Trade Receivables 149.4 192.6 79.5 174.9 160.0
Prop dev cost 597.2 583.5 566.2 556.3 524.4
Inventories 2.3 2.3 2.1 0.7 0.7
Cash -OD 75.7 84.3 58.7 23.3 29.4

Total Liabilities 355.4 396.4 310.2 357.4 331.1
Trade Payables 141.0 171.8 195.7 274.7 253.7
ST Borrowings 74.2 68.8 42.3 23.6 32.2
LT Borrowings 75.8 82.3 35.8 21.4 1.5

Net Cash Flow 17.3 25.8 -10.1 -45.5 -39.4
Operation 11.2 -18.4 130.0 65.3 68.8
Investment -33.4 -22.9 -93.2 -63.9 -55.7
Financing 39.5 67.2 -46.9 -46.9 -52.5

EPS 6.50 25.20 12.40 10.50 14.00
NAS 1.67 1.64 1.50 1.41 2.02
D/E Ratio 0.09 0.09 0.03 0.03 0.01

Matrix's FY15Q2 revenue and PATAMI drop 62% & 74% respectively compared to preceding quarter of FY15Q1!

They are even lower YoY compared to FY14Q2!

I guess all investors who follow Matrix closely should not be surprised by this result right?

This kind of result is already widely expected in fact.

After the bonus issue last month, I did think of whether I should sell some Matrix shares first as its share price will probably drop after "bad" Q2 result announcement, and I can buy at lower price later if I want to.

Anyway I did not do that, simply because I consider myself a "business owner" of Matrix.

Why should I sell my shares in this great company to others?

What actually surprise me a little is Matrix's latest unbilled sales.

Its unbilled sales stands at RM540mil at end of Q2 (Jun15), which is the highest level in 2 years.

The higher unbilled sales this time is due to more new sales achieved in FY15Q2 (RM210mil) and lower revenue recognition (RM120mil) in the same period of time.

The major contributor of this surging unbilled sales is from Bandar Seri Sendayan (BSS), in which the unbilled sales of projects there surge from RM264mil a quarter ago to RM427mil in FY15Q2.

No revenue recognition from land sales in current quarter though, as most have been rushed to be completed before GST last quarter.

New sales in 1H15 reaches RM367mil. So FY15 sales target of RM600mil (excluding industrial land sales) is well within reach.

Looks like Matrix's property is not too much affected by soft property market, just yet.

Matrix has launched RM437mil worth of new projects in the first half of 2015. It changed its plan to scale down targeted launch in FY15 from RM1.1bil to RM666mil. It will launch Residency SIGC with a GDV of RM229mil in Q3.

Planned project launch in 2016 include affordable housing project worth RM1bil in Kota Gadong Perdana next to Bandar Seri Sendayan.

This huge project comprises 3200 units of houses priced below RM400k, and should be able to help Matrix to sustain sales in FY16.

Both the school and clubhouse still register operating loss in this early stage of operation.

There are 450 students in Matrix Global School as at mid-2015, compared to 320 in the end of 2014.  The figure has reached 500 in August. Matrix targets 800 student by year end.

Besides, Matrix has just incorporated a new company Matrix Healthcare Sdn Bhd, which is believed to provide healthcare services in BSS in the future.

Matrix declares a 2nd interim dividend of 3.5sen per share. It has a policy to pay out at least 40% of its net profit.

I expect at least 15sen dividend for FY15.

Matrix's PATAMI should be able to reach at least RM200mil for FY15. With about 542mil shares at the moment, its projected EPS will be 37sen.

Its forward PE and DY will be 6.0x and 6.7% at current share price of RM2.23.

Long term investors in Matrix should focus on its business, not its share price.


  1. Matrix dividend policy look attractive

    1. Ya, that's one of the reason to own its shares

  2. Sir..I totally agreed with u..must treat as business owner-share holder in Matrix...waiting dividen payout...keep patiently..wait for more return..buy some more if price further down RM2.00..No fear..Ha..ha..

    1. Share price movement just reflects people's emotion, but not many people can totally ignore share price volatility. I'm still learning :)

  3. Ya..not to look at share price is very hard, unless u limit yourself to look at it only once a week or whenever u want to buy. Like as in these few days looking at the paper gain burning away day by day is kinda dilemma for many ppl whether to sell, hold or to make any decision. Good luck for us and those still on board ^_^•••

    1. Really need a good luck now. Have to keep telling myself: Volatility is a friend of investors. But where is my cash???

  4. Hi,

    Can you share how do you calculate unbilled sale and sale figure?


    1. Hi Sam, those figures can be obtained from Matrix financial result presentation and also analyst reports.

  5. Hi BD,

    Can I know where you get this data of "new sales achieved in FY15Q2 (RM210mil)" and "unbilled sales of projects there surge from RM264mil a quarter ago to RM427mil in FY15Q2."

    Thank you.

    1. Hi Chris, you can find this data from Matrix's latest quarterly result presentation slides in its official website. Slide no.3 & 4.


    2. Hi BD,

      I am still unable to locate the new sale of Q2 of 120m, and also "New sales in 1H15 reaches RM367mil. So FY15 sales target of RM600mil (excluding industrial land sales) is well within reach."

      Can you enlighten me on which slides?

    3. They're all in the slide which I cut & paste into this post (the slides with many colours & arrows above). New sales in Q2 is 210m (not 120m), shown as bar charts within that slide. The 600m sales target is from analyst report, but now the target has been increased to 650m.