Our recent meeting with the management reaffirms our belief that BRDB is wellpositioned
to ride on the next upcycle in 2011. In the near term, however, FY10
earnings are likely to fall sharply from a year ago as its high unbilled sales will be
largely exhausted by end-2009. The upside earnings surprises for FY10 are the
launches of its remaining projects in CapSquare and its >RM400m Hartamas II
condos project. Since we upgraded BRDB to a ‘buy’ in our 26 Aug 2009 sector report,
its share price has appreciated by as much as 18%. Given the limited further upside,
we are downgrading BRDB to a NEUTRAL for now.
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