Tambun

Tambun Is Simply Indah

Tambun Indah FY13Q4 Financial Result

TAMBUN (RM mil)	FY13Q4	FY13Q3	FY13Q2	FY13Q1	FY12Q4
Revenue	118.4	97.1	82.6	78.3	75.7
PBT	36.3	31.2	26.3	24.0	20.8
PBT%	30.7	32.1	31.8	30.7	27.5
PAT	22.1	17.2	14.0	11.7	11.3
Total Equity	310.1	273.9	243.1	235.3	223.2
Total Assets	496.9	510.2	475.0	455.5	443.9
Trade Receivables	86.6	83.8	79.8	82.0	70.6
Prop dev cost	125.1	129.6	131.5	132.9	129.2
Inventories	0.3	0.0	0.0	0.3	0.3
Cash	125.9	141.9	117.2	99.7	96.0
Total Liabilities	183.3	185.0	185.9	178.8	182.0
Trade Payables	81.1	74.5	69.7	63.9	93.0
ST Borrowings	24.8	26.4	26.7	16.6	6.7
LT Borrowings	73.3	73.8	80.3	92.1	77.1
Net Cash Flow	24.3	52.5	22.9	4.4	51.9
Operation	57.9	32.5	2.0	-16.7	84.1
Investment	-21.4	-4.5	-4.2	-1.7	-52.9
Financing	-12.2	24.5	25.0	22.7	20.7
EPS	6.14	5.22	4.46	3.77	3.62
NAS	0.79	0.82	0.76	0.76	0.72
D/E Ratio	Net cash	Net cash	Net cash	0.04	Net cash

Again, Tambun registers another strong and record breaking quarterly financial result.

This time, its latest quarter's revenue grows 22% QoQ while profit attributable to shareholders grows 28.5% QoQ. It is noteworthy that its net profit shows an uninterrupted growth trend for the past 8 quarters.

What's more, the acquisition of the remaining shares in its 2 subsidiaries Palmington & TID was only completed on 25th Nov 2013. This means the new acquisition just contributed one month to its latest FY13Q4 financial result.

For the full FY2013, net profit attributable to non-controlling interest is RM22.8mil out of a total net profit of RM87.8mil (26%). I believe around 90% of profit for non-controlling interest went to Palmington & TID.

Pearl City is still Tambun's main income generator. Even if property sales in FY14 hit a snag, I think Tambun can still generate better profit to its shareholders as profit to non-controlling interest will be largely diminished.

Tambun (RM mil)	FY13	FY12	FY11	FY10	FY09
Revenue	376.4	296.7	191.8	128.1	100.9
Revenue growth %	26.9	54.7	43.7	27.0
PBT	117.7	79.0	46.8	36.2	30.0
PBT%	31.3	26.6	24.4	28.3
PAT	65.0	40.8	23.4	25.2	23.9
PAT growth %	59.3	75.1	-7.1	5.4
EPS	19.77
NTA	0.79	0.72	0.70
ROE	21.0	18.3	15.0
DPO %	40.1	40.4	50.3	40.3

Overall in FY2013, top and bottom lines grow 26.9% and 59.3% respectively compared to previous year. Besides, its ROE reaches 21.0.

Tambun proposes a single tier final dividend of 4.6sen, bringing its total to 6.6sen for FY2013. This represents a dividend payout of 40.1% of net profit which is expected.

At share price of RM1.74, it is a dividend yield of 3.8%.

At the end of FY2013, Tambun's unbilled sales stand at RM455.4mil. It plans to launch RM600mil worth of property in 2014 including Pearl Avenue 2, Pearl Tropika and Raintree Park in its Pearl City.

Everyone knows that there will be a slowdown in property market in 2014. How will it affect Tambun?

With the opening of second Penang bridge, influx of renowned developers to Seberang Perai Selatan and the exciting development in Batu Kawan, personally I don't think Tambun Indah's Pearl City will suffer a lot.

It may be a blessing in disguise as during the time of poor property market sentiment, genuine home buyers and investors will turn to more affordable properties in main land Penang, which are mostly 50% cheaper than its island's counterpart.

Tambun will start to construct GEMS international school building in June and it will be completed by September 2015. It is said to be the largest in Penang.

At the same time, it will also start the construction of phase 1 shopping mall in Pearl City Business Park this year, while still working on the plan to build a medical center there. All these will surely enhance the selling point of its Pearl City projects.

At RM1.74, Tambun's share price has already exceeded my own target price of RM1.58 calculated using FY13 estimated net profit of RM60mil. Using the actual net profit of RM65mil and paid up shares of 394.7mil, its FY13 EPS will be 16.5sen. 

Nevertheless, as I expect the new acquisition of Palmington & TID as well as billings from Straits Garden project to contribute significantly in FY14, I will include FY13 non-controlling interest's profit into the calculation of revised target price.

So this will come to RM85mil estimated net profit for FY14. Projected EPS will be 21sen thus new target price is RM2.10 if PE ratio is 10x.

Tambun still remain in net cash position. For it to continue its impressive growth, hopefully it can acquire more strategic land in the near future.