KUALA LUMPUR: Scientex Bhd is on track to achieve its property launch target of RM2 billion for the financial year 2023 (FY23), said RHB Research.
The research house also expects the company’s property segment to be the main earnings contributor in the coming quarters.
“The construction of its ongoing projects has been progressing steadily. In the first half of 2023 (1H FY23), a total of RM1.15 billion worth of properties were launched with a take-up rate of 70 per cent – a stark improvement from the RM410 million worth of properties launched in 1H FY22,” it said in a note today.
In a separate note, Kenanga Research said the company’s property division, which focuses on the affordable residential segment, seems to hold up relatively well.
“However, we are mindful of rising mortgage rates and construction costs that could push its products beyond the reach of some potential buyers,” it said.
The research firm noted that in a bid to expand its affordable housing brand into new markets in the Southeast Asia region, Scientex had entered into a joint venture with Altitude, a developer in Thailand, and Creed Group, a Japanese real estate investment group, for a stake of 24.5 per cent in an affordable housing development project in Bangkok.
The project is expected to start construction by the end of this year.
Meanwhile, the research house opined that the firm’s plastic packaging segment will continue to be weighed down by slowing demand for industrial plastic packaging on the back of the global economic slowdown, although the consumer plastic packaging segment should stay resilient.
“The elevated operating cost on higher energy and labour costs are not helping matters either,” it said.
Overall, Kenanga Research downgraded its call on Scientex to ‘underperform’ but maintained the target price (TP) of RM2.99, while RHB Research reiterated its ‘buy’ call on Scientex’s shares with a higher TP of RM3.91.
At 11.30 am, the counter fell by eight sen to RM3.43 with 324,700 shares traded. – BERNAMA
