AME Elite Consortium Bhd (AME)’s 1QFY24 core net profit surged 282.4% YoY to RM23.3m, driven by the higher contributions from property development, engineering services, property investment and management services segment, as well as stronger recognition from the share of profit from the equity accounted joint ventures.
“Revenue for the quarter added 62.5% YoY to RM222.5m. The reported core net profit amounted to 34.9% of our expectations of RM66.7m and 35.8% of consensus expectations of RM65.0m. The better-than-expected results were mainly due to the strong contribution from the property development segment,” said Malacca Securities in the recent Stock Digest.
They gather that AME is equipped with an outstanding construction & engineering order book of RM138.3m that will sustain earnings visibility for the next 2 years.
After achieving a record-breaking new sales performance of RM479.2m in FY23, AME delivered new property sales at RM105.8m during the quarter. Moving forward, unbilled property sales at RM253.5m will sustain the property development segment earnings for 2 years.
“Looking ahead, AME will be kept busy with the on-going industrial park developments with a balanced gross domestic value of more than RM1bn to sustain long term revenue visibility till 2030,” said Malacca Securities.
The development of i-TechValley industrial park and the impending commencement of i-Park @ Senai Airport City (Phase 3) will support the long-term prospects.
In addition, AME is undertaking further land banking activities in Penang that sits on 176-ac of land through a joint development. The exercise that is targeted for completion in 2024 will generate potential gross domestic value of RM1bn.
Meanwhile, the construction of the first dormitory for i-TechValley at SILC, will bring an additional capacity of 2,683 beds. Construction commenced in the previous quarter and is slated for completion in 2H24.
“We expect take-up rates to remain favourable (>90%) that is similar to current i-Stay dormitories. We continue to favour AME that is well positioned to draw global entrants into their industrial parks as multinational companies expand their supply chain into the Southeast Asia market,” said Malacca Securities.
Already in 1Q23, Malaysia’s foreign direct investment stood at RM37.5bn. Reported earnings came above expectations and outlook will be sustained by the expansion of i-Parks.
