RHB Research has maintained its BUY call on LBS Bina Group Bhd with a target price of RM0.54, despite cutting its FY26 to FY28 earnings forecasts after a weaker first half.
The research house said RM1.06 billion in unbilled sales provides earnings visibility for 2H26 while RM658 million in property sales and RM370 million in bookings indicate underlying demand remains intact.
LBS Bina’s 1H26 core profit fell 42% year-on-year to RM32.1 million, accounting for about 23% of RHB’s full-year forecast. Revenue was broadly flat at RM637 million as stronger construction and trading contributions offset an 11% decline in property development revenue.
Property development profit before tax fell 36% to RM66.7 million while the segment’s 2Q26 margin narrowed to 10.4%. RHB attributed the weaker performance partly to a high base from contingency-sum reversals a year earlier.
Still, property sales reached RM658 million as at 18 August, representing about 47% of its RM1.4 billion FY26 target, with demand mainly driven by Alam Perdana Industrial Park and Centrum Iris.
The developer has rolled out only about RM577 million of its RM2.3 billion FY26 launch pipeline, leaving a sizeable slate for the second half. Upcoming projects include SPNB Cyberjaya, Sg Penchala and Alam Perdana Commercial, with 88% of the pipeline located in the Klang Valley.
RHB cut its FY26 to FY28 earnings forecasts by 14%, 13% and 12% respectively but said it continues to favour the stock for its attractive dividend yield and medium-term growth prospects, particularly its Kwasa Damansara development.
As of 11.15 am, the stock price was flat at RM0.435.
