Crest Builder: Higher sales, higher profits (good sign for industry)

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If we ask our real estate negotiator friends, nearly all would tell us that it’s harder to sell to prospective buyers these days. So, is the property market in trouble? Asking the first-time home buyer or even the ones who are still waiting to buy may not yield the best answer. It’s better to look at the developers’ results instead. Oh yeah, this is an earlier article about property price too. 

Here’s one recent one. Crest Builder Holdings Bhd’s net profit for the third quarter ended Sept 30, 2018 (3QFY18) jumped nearly five times to RM33.83 million from RM6.9 million a year ago. It has achieved higher sales in its property development division as well as a land disposal gain. Quarterly revenue grew 29% year-on-year to RM177.06 million from RM137.24 million previously. Revenue for the property development division grew fromRM25.5 million to RM95.2 million a year ago and this has contributed to division’s profit before tax jumping to RM41.1 million from RM2.8 million. Article in TheEdgeMarkets.com here. 

In a statement, it said that over a nine-month period, the group’s net profit grew 2.6 times y-o-y to RM53.59 million from RM20.28 million mainly as its property development division registered improved performance. Revenue climbed 32% to RM452.61 million from RM342.95 million with higher contributions from both its construction and property development divisions.  It said, “The property development division will continue to contribute positively to the group in year 2018. Our existing developments in Shah Alam cater to the first time buyer market segment. We expect the responses to our developments to be encouraging.” Crest Builder’s shares grew 12 sen or 12.63% to close at RM1.07 today, giving it a market capitalisation of RM182.64 million.  Article in TheEdgeMarkets.com here. 

Time to buy its stock? This is what Rakuten Trade says about it’s stock price. “Crest Builder is currently trading at around 64% discount to its book value per share and is currently at a multi-year low valuation with forward price-earnings ratio of only 4.9 times, compared to its three-year historical average of 10.7 times.” Article in TheStar here. By the way, 4.9 times price-earnings ratio means that the stock price is undervalued. Happy following.

written on 1 Dec 2018

Next suggested article: Housing loan approvals stable. Developers still building

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