NRA Research Report – 4Q17 Results Update
Excerpt from report:
Current Price S$0.130
Fair Value S$0.300
Up/ (downside) 131%
Cost Savings to Drive Profit Growth in 2018
Revenue grew strongly in 2017. For the whole of FY17, Regal reported a 13% increase in revenue to RM168.6m. Growth was mainly driven by an increase in construction revenue, arising from project management work undertaken by the group. Due to local statutory reasons, Regal would undertake project management contracts to design, construct and sell properties at some projects and construction revenue refers to the value of building activity performed. As a result, construction revenue rose from RM12.7m in 2016 to RM46.7m in 2017.
Regal has performed comparatively well in 2017, recognising RM110m of property development revenue while its peers’ property development revenue fell by 24% to 29% year-on-year. Nonetheless, it will help to boost confidence if Regal can demonstrate higher balance sheet liquidity, e.g. by lowering receivables or inventories.
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