Business Times Online, 22 February 2014 – Tropicana's fair value seen at RM2.19

Business Times Online, 22 February 2014

RHB Research has reaffirmed its "buy" call on Tropicana Corp Bhd and sees the fair value at RM2.19, based on a 25 per cent discount to its revalued net asset value (RNAV).

According to RHB Research, Tropicana's financial year (FY) 2013 earnings came in stronger than expected due to higher revenue from property development and higher land sales in the fourth quarter of last year (4Q13).

"Tropicana's FY13 net profit of about RM188.2 million was slightly above our estimate. Earninngs in 4Q13 were boosted by profits from land sales and higher progress billings."

The company's earnings prospects remain positive, underpinned by new sales amounting to RM2.16 billion in FY13 and high unbilled sales totalling RM2.18 billion.

The research house noted that more launches are planned for FY14.

"Tropicana is targeting for launches of up to RM3.2 billion for FY14, although this figure could be lower given the softer outlook for the property sector.

"However, it is confident of delivering new sales totalling about RM2 billion in FY14. It will sharpen its focus on the central and northern region, and 40 per cent of the offerings will be landed properties."