Yoma

Yoma: mixed 2QFYMar13 results. Revenue at $11.6m, +59% yoy, largely driven by the sale of residences and land devt rights (“LDR”), which contributed ~92% of group revenue. Revenue from the sale of residences rose more than 3x yoy to $7.5m, reaffirming the Group’s strategy to move towards the sale of completed projects vs the sale of LDRs. The boost in revenue came from sales of additional property devt projects such as Ivory Court Residences II at Pun Hlaing Golf Estate and apts at Star City. Gross margin improved from 27.7% in 2Q12 to 47.2% in the current quarter, mainly due to i) higher selling prices of LDRs and residences which climbed 20-25% yoy and ii) a reversal of construction costs of ~$1m. However, Yoma recorded a net loss of $4.1m, vs net profit of $1.4m last yr, mainly as admin cost rose significantly to $9.3m, vs $0.5m in 2Q12, arising from share based payment to CEO ($5.5m), employee share option expense ($0.5m), and net FX losses ($1.4m). Striping out the non-cash items, the Group would have returned a net profit of ~$1.7m, +22% yoy. On outlook, mgt highlights that it is close to acquiring the 10 acres of land in downtown Yangon that its parent SPA Group has offered for sale, which would see it expand further into commercial property devt. On strategy, mgt notes the attendant high yield from rental mkts means it may hold finished housing and lease it to customers in future, instead of selling it. It is likely to begin this strategy with one of the buildings at Star City. Mgt maintains that at the political level, there continues to be very positive devts in Myanmar. The greater level of business interest from US organizations could bode well for the Group and there is an expectation that a new foreign invmt law will be passed within the next 12 mths, further encouraging economic devt. Yoma trades at 1.9x P/B.