It had amassed projects with a gross development value (GDV) of close to RM11bil.
Its catalysts include its landbank and new phases of earnings growth.
A few key developments point to an immediate revaluation of the stock. Based on a 40% discount to its revised net asset value, Malton could be valued at RM1.81.
First of all, its RM3.5bil Bukit Jalil City project may be a turning point and key earnings catalyst moving forward. Malton’s two largest projects are Bukit Jalil and Batu Kawan Project (RM3.88bil GDV).
In Bukit Jalil, Malton has sold RM400mil worth of shop lots in that project. Of the total GDV of RM600mil for the 120 shop lots in its Bukit Jalil City project, 70% have been taken up. As the shops were launched in Jan 2014 – March 2014, earnings have already started kicking in from the fourth quarter of financial year 2014 (the April to June 2014 period).
Secondly, Malton has over RM1bil projects in the pipeline for its year ended June 30, 2015, and this will be a huge contributor to its earnings. Compared with only two new launches in FY14, FY15 will see more launches being scheduled as many projects are now ready to be rolled out after some delay.
These include the serviced apartments in Bukit Jalil and Pantai Dalam, landed houses in Ukay Spring, Kuala Lumpur and shop lots in Pengerang, Johor. Most of these will be quite sellable.
Thirdly, Malton has started streamlining its landbank to sharpen its development focus.
It recently sold two parcels of land in Sungai Long and Sungai Buloh. The selling of these two parcels will boost its FY15 earnings with a total net gain of RM52mil.
Fourthly, the company is now (Oct 2014) sitting on a RM84mil potential gain from the 187,000 sq ft of office space in Pusat Bandar Damansara which will be delivered in four years.
Although construction on the redevelopment of Pusat Bandar Damansara (PBD) has yet to start, the 187,000 sq ft of office space assigned to Malton by Johor Corp (as part of the settlement for PBD land between JCorp and Tan Sri Desmond Lim) is now (Oct 2014) worth RM224mil based on a market value of RM1,200 psf.
This suggests a potential 60% gain of RM84mil on top of the RM140mil that the company booked as investment asset.
For the fourth quarter to June 30, 2014, Malton’s net profit was down 46.5% to RM8.64mil on the back of a 21.45% drop in revenue to RM102.16mil. The drop in profit and revenue were due to higher billings and profit recognition from the completion of Amaya Maluri project in Kuala Lumpur and Mutiara Residence project in Penang.
The construction and project management division also declined due to lower billings as a result of the recent completion of the Jaya 14 project.
For the full year to June 30, 2014, Malton recorded a 46.47% increase in net profit to RM51.83mil on the back of a 39.29% jump in revenue to RM500.3mil.
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