~ tAmbUn IndAh lAnd bErhAd Q4FY12 Update ~

Tambun Indah Land Berhad had released its 4^th quarter report and achieved a reasonably good and improved result for year 2012.

• The current quarter recorded a 34.5% increase in revenue and 29.9% increase in profit after tax over the same quarter of preceding year while in terms of full year, year 2012 had seen a 54.8% increase in revenue and 40.9% increase in profit after tax compared with year 2011.
• The increase in revenues was mainly due to the property development segment which contributed around 97% to Tambun’s revenues in year 2012.
• Profit margin had increased to 19.21% from 17.56% in year 2011.
• Diluted EPS increased to 14.81 cents. PE is around 6.1 based on today price of RM0.90.
• ROE increased to 20.5 from 15.21 in year 2011 due to great increase in profit.
• In terms of balance sheet, share capital of course increased as a result of the right issue while retained profit increased too due to the increases in profit.
• Tambun purchased an undeveloped land bank which lead to an increase of around RM50m under non-current assets, investment properties column.
• Current ratio increase to 34.7% from 27% in year 2011, but still below 50% which considered at manageable level.
• Total borrowings increase to RM83m at which RM77m is long term borrowings while having RM95m of cash and bank balances in hands. This should not post a great liquidity problem but will need to further monitor in the future
• From the right issue, there is still around RM15m left for utilization for year 2013.
• The board has recommended a final dividend of 3.3 sen and thus bring the total dividend for year 2012 to 5.3sen compared with 3.8sen for year 2011.

There is still room for growth to meet PE of 8, but one must take consideration of the warrants quantity into PE calculation. And, somehow the price had seen going up from 70 cents to RM0.90 nowadays. I had been procrastinate enough and waited for any price correction to drop below 70cents for far too long and missed the boat. It’s too bad. I must learn when to invest after identified any good company. 

~ Tambun Indah 恒大置地 (TAMBUN) AnAlysIs ~

Recently, there are quite a number of investors mentioned about Tambun Indah online through blogs and forums for the past few weeks which really caught my attention. I decided to study about this company through the weekend. 

Tambun Indah is a propert developer with most of their land mark in Mainland Penang. There are many completed/ongoing projects mainly focus on residential properties. Tambun Indah listed on the main market in Jan 2011. 

Tambun Indah group managed to record profits for the past 5 years albeit a lower revenue on year 2009, but overall it's still considered as a good fundamental company which recorded profits continuously for the past few years. As the group is only listed last year, not much historical data can be studied. The fact that Tambun Indah which started up in year 1993 and survived few financial crisis until today shows that the management team is doing really a good job to establish itself as a premier real estate and property developer. 

As at cumulative quarter Q312, Tambun recorded a 63% y-0-y increase in revenue and the diluted EPS for 9-months period is 11.30 cents. It should has no problem to get a full year 14 cents EPS for year 2012. Base on today price of RM0.76, its PE is only 5.4 which still has much more room to grow. Profit margin at the region of 18% and ROE at 20% which shows the management team control the cost of sales and utilise their earnings for expansion expenditure pretty well. 

As at balance sheet, debt/Cash ratio is less than 1 which majority of the borrowings are long-term loan. The current ratio is high at 3.80 which shows a good liquidity. Retained profits are low, which is 1/3 of share capital. Thus, it's understandable that the group issued a right issue consisted of 2 right shares and 1 warrant for every 5 shares previously held to raise money. 

Tambun has a dividend policy of distributing 40-60% net profit as dividends. As a predicted  full year EPS of 14 cents, it will distribute at least 5.6cents as dividends. Based on today price of 0.755, the dividend yield is 7.4% which is consider high. 

Tambun's portfolio is on mainland Penang which I personally think that the price of the residential property will just keep increasing due to the land scarcity there. The challenge for them is to get the land to develop and control the operation cost as well as the cost of sales. 

I have put Tambun in my monitoring list and it's one of the property stocks I would like to have beside Hua Yang and Mahsing. These three companies are just as good as they are in terms of fundamental. What I need now is to wait for the price to come down a bit so that I can own some as the price has gone up almost 20% thanks to the recommendation of 冷眼 during his talk. Perhaps the correction after the exercise date of its interim dividend at Jan 2013 will be a good time to purchase.