MAYBANK Investment Banking Group sees steady growth for Ayala Land Inc. (ALI) in the second half of 2024 after the latter reported higher-than-expected first-half results.
ALI’s first-half net income rose 15 percent year on year (YoY) to P13.1 billion, which Maybank said was slightly ahead of their fiscal year (FY) 2024 estimate at 47.7 percent and in-line with consensus at 46.6 percent.
“We see sustained growth in the high-end residential segment which accounts for [the] majority of our earnings and net asset value,” Maybank said in a statement.
Meanwhile, real estate revenue grew by 28 percent to P82.5 billion as the residential segment improved by 40 percent YoY, while pre-sales increased 17 percent to P64.4 billion.
ALI hit Maybank’s 49-percent FY 2024 pre-sales forecast.
The property developer incurred P33.7 billion worth of residential projects despite management’s decision to lower its full-year target to P85 billion from P100 billion to bring down inventory level from 19 months to 15 to 18 months.
President and Chief Executive Officer Anna Ma. Margarita Bautista-Dy said, “We want to really use the land bank in our existing estates, as opposed to keep launching new ones. So, it’s a slightly different approach, but it’s really because we feel that we want to make sure that all our estates really all come to life.”
Maybank, on ALI’s value proposition, said that its “diversified portfolio should enable it to see faster earnings recovery than peers, led by the more upbeat residential and office segments.”
“We view ALI as a beneficiary of the emerging countryside development and sub-urbanization megatrend, given its presence in key regional locations such as in South Luzon, Bicol, Cebu and Davao,” Maybank noted.
According to Maybank, ALI’s core earnings are expected not to revert back to pre-pandemic levels until 2025, but it forecast the company to deliver compound annual growth rate (CAGR) of 15 percent over 2023 until 2026 estimates on the back of 12-percent revenue CAGR.
Earlier this month, ALI Chief Finance Officer Augusto Bengzon explained the company will keep their inventory tight and make efficient use of the working habitat and plan to launch three to four premium property projects before the end of 2024.
ALI also said it is not launching new estates, but will be developing new districts within its existing estates. Also, the company has a land bank of some 11,300 hectares and utilizing an average of 800 hectares per year, with plans to develop another 4,000 hectares in the next five years.
Shares of ALI on Thursday rose 85 centavos to close at P34.85 each.
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