Sin Chew Daily, 5 June 2014 - Estate industry profits might stagnate

Sin Chew Daily, 5 June 2014

Slightly worse than expected quarter, the company earned webs industrial sector continued stagnation shutter Li Yongjian / reports

(Kuala Lumpur 4 News) Malaysian industrial companies slightly worse than expected first quarter results, analysts expect the sector in the next quarter will continue to make pieces of stagnation before.

Affin research indicates that industrial developers in the first quarter results by comparison to the ups and downs in different 'but quarterly comparison, in addition to Ipoh Land (IJMLAND, 5215, the motherboard industry group), the majority of the company down, recorded a weak earnings and lower revenue and profit increase. The bank said there is focus on the price of real estate or condominium developers, outperforming focus on upscale condominiums and developers integrated industry.

"Overall, the performance of the sector was slightly lower than our expectations." Developers are facing problems to earn pieces erosion, cost pressures are elevated (higher land prices and the cost of materials, labor and compliance with regulations), but r is limited by the intense competition, banks have tightened lending policies and weak industrial market sentiment, developers pass on the cost of space. The bank predicted the next quarter's profit increase industries continue sluggish.

Due to the low basis of comparison in the first quarter of 2013, according to the relative increase in the first quarter of the year in terms of industry sales, last year in the first quarter due to the home buyers on the sidelines before the candidates, rfn 'impact on industry sales, however, the first quarter of this year, industry sales are Since the second quarter of 2013 the lowest 2014 Budget introduced measures to fight the impact of the housing credit capacity, industry market sentiment and the new disc Recommend volume in the first quarter and more developers defer introducing new disks.

Industry sales in the second half material micro-Yang "We expect industry sales to rise slightly in the second half, because the developers withered entire pricing strategy and product mix, as well as introducing new dish to accelerate."

Affin Research remains "Che and" rating, although for 2014 industry market outlook remains cautious, but I think generally negative factors has been digested, fell risk is limited due to the industrial share prices adjusted net assets Wa at a reasonable 0.6 to 0.7-fold (Rayon agency (TROP, 5401 motherboard industry group) excluded), with similar levels of past transactions, followed by the field trades at 10.4 times, lower than 14.6 times the KLCI, developers generally strong balance sheet, in 2014, and 15 years earnings remain tough, as well as long-term fundamentals (demographic and economic environment) still supports the development field. .