DIJAYA ... Mar10

S & P Results Review & Earnings Outlook

 Dijaya’s 2009 results were below our expectations, with full-year net profit of MYR49.7 mln vs. our MYR57.0 mln estimate. The variance was due mainly to a MYR11.0 mln of provision for impairment loss made in respect of the JV project with Dijaya Malind JV (Mauritius) Limited. Excluding the exceptional item, its 2009 results would have been broadly within our expectations.

 On a QoQ basis, revenue was higher at MYR101.3 mln in 4Q09 vs. MYR97.3 mln in 3Q09, but pretax profit declined to MYR7.4 mln from MYR41.2 mln in 3Q09. The decline in earnings was due mainly to: (i) the write-down for its JV project and (ii) in 3Q09, a reversal of provision for diminution in value of its quoted investments, which amounted to MYR20.9 mln.

 Going forward, Dijaya is planning to launch its high-end condominium project, Tropicana Grande, and shop-offices, Tropicana Avenue, this year. In addition, Dijaya recently acquired “Bok House” (55,929 sq ft) located near to KLCC Twin Towers, along Jalan Ampang for MYR123 mln for development of an integrated commercial development
comprising an international hotel, serviced suites and/or office suites. Dijaya has sufficient funds to make the acquisition as it recently raised more than MYR100 mln from its 3-for-4 rights issue. We have adjusted our 2010 earnings forecasts slightly and introduce our 2011 forecast earnings.