Malacca Securities Sdn Bhd expected follow-through in buying interest in the near term for Avaland Bhd targeting RM0.285 to RM0.29, with a LT target at RM0.325, as the technical readings for the group are positive.
“Technically, Avaland’s share price had experienced a flag formation breakout above RM0.25, and closed at RM0.265. Monitor for a breakout, targeting RM0.285 to 0.29, with a LT target at RM0.325.
“Support is located around RM0.245-0.25, while cut loss is at RM0.24,” it said in its Technical Focus note today (Jan 16).
The independent research house said in 3Q23, Avaland reported a jump in net profit to RM17.2 mlillion from RM6.2 million, which is an increase of 127.5% year-on-year (YoY).
“(This is) on the back of the stronger revenue of RM156.2 million from RM56.3 million, an increase of 277.6% year-on-year (YoY).
“The stronger sales were supported by the advanced construction stage combined with healthy take up for Avaland’s ongoing projects,” it said.
Avaland is a property developer with various developments at Cyberjaya, Petaling Jaya and Subang Jaya. It is also a subsidiary of Ayala Land Inc. and has since expanded its product offerings to luxury residences.
Malacca Securities said Avaland could also benefit from the property outlook to be boosted by easing interest rates and government initiatives.
“(The initiatives) such as the pause in OPR hikes in July, the increase in the overhang of residential properties in Malaysia and government initiatives such as the stamp duty exemptions for first-time homebuyers, the Housing Credit Guarantee Scheme as well as the easing requirements for Malaysia My Second Home (MM2H) are likely to boost home-ownership.”
The house also said the new management team will also lead Avaland to a stronger outlook.
“Since the change in management team,as Teh Heng Chong is appointed as chief executive officer (CEO) in 2019, the company has started seeing improving earnings after 1Q23.
“The group has started to focus on building better brand, focusing on quality of their products,” it added.
Teh has recently resigned from the post, but Malacca Securities believed the new CEO will be more than capable to carry the company in the right direction.
