This former market darling which fell out of favour when it slipped into the red in 2009 may soon be back on investors’ radar screens, having reinvented itself by switching to wider-margin medium-to high-end products and seizing control of its construction activities. This enabled it to return to the black in FY10 and garner over RM500m in unbilled sales, which will help it to meet its ambitious goal of more than doubling its FY04 earnings high in FY13, pushing P/Es down to only 3-4x. Also, its expectations for its long-delayed China venture have become more realistic and we would not be surprised if it exited the market if it got a good offer. Assuming a 40% discount to RNAV, which is similar to the discount for smaller developers, LBS would be valued at RM1.88, offering investors 117% upside.
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