KUALA LUMPUR: MGB Bhd's outlook remains resilient, underpinned by its construction orderbook of about RM1.23 billion and unbilled sales of RM740 million from on-going property development projects.
Public Investment Bank Bhd (PublicInvest) said MGB remains focused on the construction of affordable homes and maintaining its orderbook replenishment target of RM600 million for FY24.
"On its venture with Saudi Arabia-based Sany Alameriah Industrial, the fulfillment of the first order for supplying and installing precast concrete products for 400 villas in Roshn Alarous project is on track.
"The material contribution could kick in from the second half of financial year 2024 (2HFY24) onwards," PublicInvest said in a note.
MGB, a construction and property development solutions provider, is a subsidiary of LBS Bina Group Bhd.
Meanwhile, PublicInvest said MGB's earnings were in line with its expectations at 23 per cent of full-year estimates though below consensus at 21 per cent.
The group's first quarter ended Dec 31, 2024 (1Q24) net profit grew 17.4 per cent year-on-year (YoY) to RM14.3 million, mainly due to better performance in its property division.
Its revenue from property division increased by more than eightfold or RM78.5 million YoY to RM87.6 million, attributed to higher unit sales and progress development for the Idaman Melur, Idaman Cahaya Phase 1 and Phase 2, Idaman Sari and Saujana Indah Phase 1 projects.
However, this was partly negated by lower revenue from the construction division (-22.7 per cent YoY), mainly due to projects nearing completion.
Meanwhile, MGB's 1Q24 pre-profit rose 28.2 per cent YoY, driven by remarkable improvement in its property division which increased by fourfold or RM12.4 million YoY to RM15.5 million, in line with higher revenue.
This was partly offset by lower profit before tax from the construction division (-58.7 per cent YoY), mainly due to higher administrative expenses and cost incurred in its oversea subsidiary.
Overall, PublicInvest kept its earnings forecast unchanged for MGB.
The firm also maintained its "Outperform" call on the company, with an unchanged target price of RM1.16.