SJ optimistic about Sentoria's next quarter

KUALA LUMPUR (Dec 19): SJ Securities Sdn Bhd is maintaining their "Neutral" recommendation on Sentoria Group Bhd with a target price of RM0.83 following the company's latest fourth quarter results (4QFY12).

"We maintain our neutral recommendation on Sentoria Group Bhd with a target price of RM0.83 with an estimated FY13F earnings per share (EPS) of 13.78 sen and forward price-earnings ratio of 6 times," SJ Securities said in a report today (Wednesday).

Sentoria Group registered fourth quarter revenue of RM43.92 million, 14% higher than RM38.49 million registered in the previous quarter which was attributed to the property development segment which contributed around 75% of total revenue.

The group's post-tax profit surged by 28.73% to RM16.79 as compared to RM13.04 in the preceding quarter. This was mainly due to the tax incentive on its leisure and hospitality segment

Sentoria Group's property development division of the group is seeing a high 80% take-up rate of completed and on-going properties, with the Bukit Gambang Resort City (BGRC) project in Kuantan being fully sold out.

The total gross development value (GDV) of upcoming projects within and outside BGRC is estimated at RM542 million within the next 5 years and the group's current total land bank is 1073 acres.

SJ Securities recommends Sentoria Group's Global Heritage South (GHS) project as a good investment opportunity for individual investors due to the advantage of sale and leaseback strategy. GHS, located at BGRC, which comprises of 5-star villas and a boutique hotel, has a total GDV of RM 335 million.

As for Sentoria Group's leisure and hospitality segment, the fourth quarter saw revenue shrink 22.22% to RM10.99 million from the previous quarter, and an incurrence of a RM1.48 million loss before taxation due to the seasonal off-peak period during the fasting month.

Looking forward, SJ Securities is optimistic about Sentoria Group's revenue and net profit end-2012. The completion of the Arabian Bay Resort has increased BGRC room capacity and is now able to cope with the peak season that sees a robust number of "play and stay" families coming in.

"In addition, the number of visitors will be robust in next 2 to 5 years due to the existing Water Park, new attraction of Safari Park which is expected to be completed at end of 2012 and the future development of Marine Park and Adventure Park in BGRC," SJ Securities added.