RHB Research has maintained its BUY call on AME Elite Consortium Bhd with a target price of RM2.30, implying 71% upside and an estimated FY27 dividend yield of about 5%, saying major land acquisitions could provide a catalyst as its Iskandar Malaysia landbank is rapidly being depleted.
The research house said AME’s 1QFY27 earnings were within expectations, with revenue growth driven mainly by its construction and property investment segments. However, lower construction margins for the stage of work completed limited bottomline growth.
Property investment also performed better following additional factory leases and contributions from the new i-TechValley dormitory. Headline profit before tax was further boosted by fair value gains of RM15.2 million from the sale of an industrial property to its REIT and RM8.04 million from land held for future investment property development.
New sales stood at RM62.06 million in the quarter, although RHB Research expects sales to accelerate and believes the company can achieve its RM400 million FY27 target, including an additional RM150 million from its Penang joint venture.
Bookings on hand included RM35.44 million in Johor and RM117.16 million for the Northern TechValley @ BKE joint venture. AME is also preparing to launch Phase 1 of i-Park @ Coalfields in Selangor.
Unbilled sales stood at RM395.1 million while outstanding construction and engineering order book was RM485.7 million. RHB Research maintained its earnings forecasts and said AME’s net cash position provides further balance sheet strength.
The target price is based on a 30% discount to revised net asset value with a 2% ESG premium.
As of 2.30 pm, the stock price gained 0.75% to RM1.35.
