PETALING JAYA: Berjaya Research Sdn Bhd has resumed coverage of Lagenda Properties Bhd and expects sales momentum to strengthen in second-half 2026, supported by a robust launch pipeline across multiple states, continued resilience in affordable housing demand, and the group’s proven track record of high take-up rates.

In a research note, Berjaya Research said Lagenda Properties recorded property sales of RM372.5 million in Q1 of 2026, primarily driven by contributions from the La’ Lumiere, Lagenda Ardea and La’ Indera developments.

“This represents 20.9% of our projected sales target of RM1.78 billion for 2026. Looking ahead, we expect stronger property sales in 2H 2026, supported by upcoming launches in Johor, Kedah, Pahang and Negeri Sembilan.

“This is underpinned by the group’s strong historical take-up rates across its completed townships and the resilient demand for affordable housing.

“We believe these new launches could further lift the group’s unbilled sales beyond the current RM1.67 billion, providing healthy earnings visibility over the medium term,“ Berjaya Research analyst Jessie Chai said in the note.

Touching on earnings, Berjaya Research noted that Lagenda Properties’ revenue declined marginally by 0.9% to RM262.1 million in Q1 of 2025, from RM264.4 million, mainly due to a 1.3% decline in revenue contribution from the property development segment.

Nevertheless, revenue recognition from ongoing projects such as Lagenda Ardea Phase 2 and Seri Embun has partially offset the softer performance.

Berjaya Research said the relatively flat contribution from the property development segment was primarily due to slower construction progress on certain ongoing projects amid festive holidays in Q1 of 2026, and to several projects reaching advanced stages of completion.

Meanwhile, revenue from the trading segment increased 18.4%, supported by stronger demand for building materials from external contractors.

Despite stronger performance from the trading segment, Berjaya Research said the lower contribution from the property development segment, the group’s core earnings driver, offset the improvement, resulting in a largely flat profit after tax of RM44.1 million.

For quarter-on-quarter, Lagenda Properties’ revenue decreased 11.9% in Q1 of 2026, weighed down by slower construction progress during the festive season and lower revenue recognition from several projects that were nearing completion. Core Patami declined 24% in Q1 of 2026, as the preceding quarter included a write-back of RM14.9 million in previously recognised impairment losses on receivables.

“We maintained our Buy recommendation on Lagenda Properties with a target price of RM2.18. We like Lagenda Properties for its strong earnings visibility over the next two to three years, backed by unbilled sales of RM1.67 billion and robust gross development value launches of RM2.65 billion in 2026.

“Further, the group has a proven execution capability as evidenced by healthy take-up rates across its existing township. Lagenda Properties also has a structurally superior cost advantage, which supports resilient margins and return on equity (ROE),“ Chai said.

Key risk factors include rising input costs, a slower-than-expected take-up rate, and an interest rate hike.