Yoma

Yoma: 2QFYMar14 net profit hits $3.3m, reversing from the $4.2m loss a year ago. Revenue more than doubled to $27m from $11.6m y/y, its highest quarterly showing since listing in 2006, driven by the continued strong sales of residences and land devt rights (LDRs) as demand for high quality homes continues to outstrip supply. Gross margins declined marginally to 44.9% vs 47.2% y/y, due to lower revenue generated from the sales of Pun Hlaing Golf Estate LDRs, where margins are higher. Nevertheless, gross margins improved by 5.8ppt compared to 39.3% q/q. Sales continued to be strong for the group’s largest residential project, Star City. As at end Sep ‘13, ~99% of the units in Star City’s Buildings A3 and A4 were sold, amounting to ~$60.9m. Based on %-of-completion method, ~$49.4m of revenue from the above sales is expected to be recognized within the next 15-21 mths as construction progresses. Management notes outlook for its real estate division remains positive and will continue to be the group’s strongest growth driver. Nevertheless it is also building its non-real estate businesses (travel and tourism, automotive), which it is confident will begin to contribute meaningfully in the near to mid term. EPS remains not meaningful as Yoma is at a nascent stage of growth. At the last close of $0.78, the stock trades at 2.5x P/B.