Lagenda rides affordable housing wave into 2025
PETALING JAYA: Lagenda Properties Bhd is expected to see stronger sequential earnings momentum going forward, underpinned by continued steady demand for affordable housing.
Phillip Capital Research expects the property developer's sales momentum to continue building sequentially, supported by its RM2.1bil in planned launches for 2025.
'Notably, Lagenda launched its RM4bil Johor Kulai township in April, which we anticipate to be a key sales driver for the group,' it said in a report.
For the first quarter ended March 31, 2025 (1Q25), Lagenda's net profit rose to RM44.59mil from RM42.72mil a year ago, while revenue grew to RM264.4mil from RM225.62mi.
Lagenda said the earnings reflected the strong market appeal of its well-planned and affordable township developments.
In a filing with Bursa Malaysia, the property developer said it had kicked off the current financial year on a strong footing, recording confirmed sales of RM251.9mil in 1Q25.
This was driven by robust contributions from Lagenda Aman in Tapah, Perak; La'Indera in Kuantan, Pahang; and Puncak Warisan in Kota Tinggi, Johor.
'As of March 2025, unbilled sales stood at a healthy RM898.9mil, with outstanding bookings of RM268.8mil, offering strong revenue visibility for the coming quarters.'
The company said it remains optimistic about its latest developments planned for the current financial year and is confident that upcoming launches will solidify the group's position for a bright future.
'In 1Q25, we also marked our entry into a sixth state through a land acquisition in Senawang, Negri Sembilan.
'These expansions reflect our confidence in the long-term prospects of these regions and the growing demand for affordable, well-designed housing.
'We remain confident that our unique value proposition – combining quality with affordability – will continue to resonate with a broad range of homebuyers.'
Going forward, the property developer said it will remain focused on executing its pipeline of launches and maintaining a disciplined landbanking strategy, targeting affordable land in strategic locations.
UOB Kay Hian Research noted that Lagenda has revised its launch target from 4,000 to 8,000 units in 2025, driven by continued demand for affordable housing.
'Looking ahead, we expect a 30% year-on-year sales growth in 2025, driven by higher project launches and better construction progress from its new townships.'
However, the research house lowered its earnings estimates for 2025 to 2027 by 13% to 15%, citing lower margin assumptions due to higher initial construction costs for township developments.
'We maintain (our) 'buy' call with a lowered target price (TP) by 16% to RM1.78 (from RM2.13), as we factor in a higher revised net asset value (RNAV) discount of 40% (from 30%), due to a more conservative margin environment in 2025 to 2026.'
Meanwhile, Philip Capital Research maintained its earnings forecast for Lagenda, given the satisfactory results.
It kept its 'buy' call and RNAV-derived TP of RM1.75 per share, based on a 30% RNAV discount.
'We continue to like Lagenda for its niche focus on affordable housing and its attractive 6% dividend yield for 2025.'
The research house added that key risks to its 'buy' call include higher building material prices and lower-than-expected property sales.
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