Kenanga Cuts Hunza To Underperform, Targets MYR1.50

30 Aug 2012

Kenanga Research downgrades Hunza Properties Bhd (5018.KU) to Underperform from Market Perform with an unchanged target of MYR1.50 after FY12 core results came in within expectations; the house notes Hunza's FY12 core earnings of MYR35.9 million account for 105% of its estimates, but cuts FY13 core earnings by 26% to MYR15.8 million.  The house adds that its unbilled sales of MYR7 million provide limited visibility. While the stock is trading at trough 0.47X forward price to book value, "we see no further upside to our target due to declining profit trends, lack of sizeable new launches in the immediate term," says Kenanga.  Over FY13, Kenanga notes that the group will likely continue to focus on completing the second phase of Gurney Paragon Mall works and may hold back other launches, resulting in FY13 estimated sales of MYR83.3 million, a 34% year-on-year decline. The stock is up 3.4% at MYR1.53.