The Edge Financial Daily, 7 October 2014 - Rm2.6b property launches slated for this month

07 October 2014

Tropicana has locked in an estimated RM1,2 billion in property sales in nine months of financial year 2014 (9MFY14). Although this was 37% lower yearon-year (y-o-y), it is notable in view of the weak prevailing property market. As only RM590 million in new properties were launched in 9MFYI4, earlier launches and completed slocks were the main sales contributors. We view this positively as it indicates Tropicana's competitiveness despite a weakening market. Tropicana plans to launch properties totalling RM2.6 billion in second half of financial year 2014 {2HFY14), all in October The group mainly focuses on Klang Valley, which constitutes83% of its 2HFY14 launch value, with 9% in Penang, where demand is more resilient, and the remaining 8% in lohor. Tropicana has signed sales and purchase agreements to dispose of three plots of land worth RM95I million. We expect the sale of Canal City land to be completed by end of 2014 while the sales of Bukil Bintang and Kota Kinabalu land are expected to be completed by middle of 2015, Assuming timely completion of the Canal City land disposal, we expect the group's net gearing to stay below 0.6 times in 2014. We believe Tropicana's net gearing has peaked.