Is Matrix Concept Holdings Bhd Worth Investing In?

Matrix Concept Holdings Bhd (Matrix) was listed successfully onto Bursa Malaysia on 28 May 2013. At that time, it was valued at RM 278.4 million in market capitalization. Presently, as I write, Matrix has grown its market capitalization to RM 1.58 billion. It is a remarkable 468% jump in value in the 5-year period.

In this article, I’ll share Matrix’s past achievements, provide an update on its future growth plans, and offer several tools to evaluate the investment potential of Matrix. Therefore, here are 8 key things to know about Matrix before you invest.

#1: Stock Symbol

Ticker Symbol: KLSE: MATRIX / KLSE: 5236

Market Capitalization: RM 1.58 billion (22 August 2018)

Stock Price: RM 2.10 (22 August 2018)

Industry: Property Development

Syariah Compliance: Yes

#2: The Business

Matrix derives most of its income from two major township development projects. They are:

1. Bandar Sri Sendayan (BSS), Seremban
   BSS is an award-winning 5,233-acre township located around 10 minutes from the Seremban town and 30 minutes from the Kuala Lumpur International Airport (KLIA). BSS is estimated to worth as much as RM 12 billion in Gross Development Value (GDV) and is currently the main source of income to Matrix.  
2. Bandar Sri Impian, Kluang
   BSI is a 900-acre township located in Kluang, Johor worth about RM 2.3 billion in GDV.

#3: Financial Results

Matrix had reported growth in both revenues and profits since IPO listing in 2013. Group revenues had increased from RM 573.5 million in 2013 to RM 818.5 million in 2018. This led to higher shareholders’ earnings from RM 151.6 million in 2013 to RM 213.3 million in 2018.

Matrix had reported its highest sales and profits in financial year 2016 as a result of a change in its financial year end from 31st December to 31st March. Thus, Matrix’s Annual Report 2016 consists of its financial results spanning from 1 January 2015 to 31 March 2016.

Source: Annual Reports of Matrix Concept Holdings Bhd

#4: Balance Sheet Strength

As at 30 June 2018, Matrix has reported to have non-current liabilities of RM 151.8 million. Its gearing ratio works out to be 12.33%, relatively low as it is substantially below 50%. The company has also reported a cash balance of RM 123.1 million and a current ratio of 2.15. Hence, Matrix is financially sound and capable of financing its working capital and invest to expand its sources of income when opportunities arise in the future.

#5: Future Prospects

Here are the key highlights of Matrix in the near future:

1. Unbilled Sales
   As at 30 June 2018, Matrix has accumulated as much as RM 1.2 billion in unbilled sales.
   
   
2. Launches in Financial Year (FY) 2019
   Matrix has planned to launch property development projects that are worth RM 1.6 billion in GDV for FY 2019. In Q1 2019, Matrix has launched RM 271.2 million in residential projects namely Ara Sendayan (Phase 4) and Tiara Sendayan 1 at BSS. For the next 9 months, Matrix would launch the remaining RM 1.3 billion worth of projects progressively. It includes a high-rise service apartment at Jalan Putra, Kuala Lumpur – the first project in the KLCC area.
   
   
3. Landbank
   On 4 August 2017, Matrix has acquired 2 parcels of land with the size of 53.4 hectares and 23.1 hectares respectively for a sum of RM 84 million. It has also acquired smaller parcels of land for RM 23 million. They are located adjacent to BSS and are intended to support the future development growth of BSS in the future.
   
   Presently, Matrix has accumulated 1,800 acres of landbank worth a combined GDV of RM 15 billion. They would be developed over the next 15 years progressively. Moving forward, Matrix has set a target to boost its landbank to 2,500 acres by 2020.

#6: Valuation

As I write, Matrix is trading at RM 2.10 a share. Thus,

1. P/E Ratio
   In 2018, Matrix has reported earnings per share (EPS) of 32 sen. Hence, its current P/E Ratio is 6.56. It is similar to its 5-Year P/E Ratio average of 6.50 presently.  
2. P/B Ratio
   As at 30 June 2018, Matrix has reported net assets a share (NA) of RM 1.64. Hence, its current P/B Ratio is 1.28, above its 5-Year P/B Ratio of 1.15 presently.
   
   
3. Dividend Yields
   Matrix has been paying dividends to its shareholders on a quarter basis. For the last 12 months, Matrix had declared a total of 13.5 sen in dividends per share (DPS). If Matrix is able to maintain its DPS at 13.5 sen for the next 12 months, I would expect dividend yields to be 6.43% at current stock price of RM 2.10 a share.
   
   Note:
   Matrix has declared DPS of 3.25 sen for Q1 2019. Its ex-date has been set at 19 September 2018. Hence, if you invest in shares of Matrix before 19 September 2018, you are entitled to receive the 3.25 sen in DPS which is scheduled to be paid out on 10 October 2018.

#7: Investors’ Relation

For any enquiries related to Matrix, you may contact via:

Phone: 1800-88-2688

Email: matrixcarecentre@mchb.com.my

Website: https://www.mchb.com.my/contact-us/

#8: Major Shareholders

As at 30 June 2018, the following are the list of major shareholders and their shareholdings in Matrix Concept Holdings Bhd:

– Dato’ Lee Tian Hock: 37.46%

– AIA Bhd: 4.04%

– Employees Provident Fund Board: 2.36%

– Citibank New York (Norges Bank 14): 1.45%

– Amanah Saham Didik: 1.29%

Note:

Dato’ Lee Tian Hock is appointed as Group Managing Director of Matrix Concept Holdings Bhd.

VIA’s Verdict

Quality:

Matrix has delivered a string of positive financial results. It grew its sales, profits, and cash reserves over the last 5 years. In addition, it has kept a low gearing ratio and a healthy bank balances which allows the company to carry out its ongoing projects and position itself for future growth. This is evident as Matrix has a pipeline of project launches in 2019 worth RM 1.6 billion in GDV and a current land bank of 1,800 acres worth as much as RM 15 billion in GDV.

Valuation:

Matrix’s current P/E Ratio is 6.56. It is relatively low as compared to P/E Ratio of other stocks with above RM 1 billion in market capitalization. In addition, Matrix pays out 6.43% in dividend yields, above most property stocks listed on Bursa Malaysia (as most struggled to pay out dividends consistently to its shareholders).

Should I Invest in Matrix?

It depends on your investment plan. I can’t answer that for you. It greatly depends on:

1. Is P/E Ratio of 6.56 attractive to you?
2. Is 6.43% dividend yield attractive to you?
3. How long do you intend to hold onto Matrix?
4. Will you buy more or cut losses if Matrix drops in prices?

If you are unsure, please do some soul searching before embarking on a stock investment deal.

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