Broker: UOB Kay Hian
Date of Report: 12 August 2025

Matrix Concepts Holdings: Industrial Land Sales and Strategic Expansion Set to Drive Strong Profit Growth

Overview: Matrix Concepts Holdings Poised for Growth

Matrix Concepts Holdings Bhd (MCH MK), a leading Negeri Sembilan-based property developer, is strategically positioned to benefit from Malaysia Vision Valley (MVV) 2.0 and its own township development expertise. The company’s diversified business model spans property development, construction, education, and hospitality, supporting a resilient revenue base and above-industry margins.

Investment Highlights

• Current Share Price: RM1.30
• Target Price: RM1.70 (Upside: +30.8%)
• Market Capitalization: RM2,458.9 million (US\$580.9 million)
• Dividend Yield: Attractive 5% for FY26F
• 52-week High/Low: RM1.63 / RM1.22
• Major Shareholders: Shi Ning Term Sdn Bhd (12.7%), Lee Tian Hock (10.3%), Lembaga Tabung Haji (6.2%), Employees Provident Fund (5.0%)

Strong Foothold in Negeri Sembilan and MVV 2.0

Matrix’s robust presence in Negeri Sembilan positions it as a key beneficiary of MVV 2.0, a massive 379,100-acre development corridor. The group is completing its second tract of land acquisition in the corridor, setting the stage for a ramp-up of industrial launches between FY26 and FY28. Significant recognition of industrial land sales is expected to uplift profitability in 2HFY26, offsetting margin dilution from geographic expansion.

Residential and Industrial Launches: Sustained Momentum

• 1QFY26 core earnings are projected at RM65m–70m, driven by backloaded industrial land sales in 2HFY26.
• FY26 property sales target stands at RM1.6 billion (+16% YoY), supported by RM377 million in 1Q launches (22% of FY26 target).
• Matrix’s flagship Sendayan township is expected to sustain RM1 billion in annual sales from FY26–29, with new launches in MVV City to fill the gap as the 1,300-acre Sendayan landbank depletes from FY30 onward.
• Steady demand is anchored by rising household formation and job creation in Negeri Sembilan, underpinned by MVV 2.0-driven industrial activity.

Strategic Expansion Beyond Negeri Sembilan

Matrix is accelerating its expansion outside Negeri Sembilan, targeting 30% of group revenue and earnings from new regions by FY28 (up from 7% in FY25). Key initiatives include:

• Acquisition of Horizon Group (to be completed Oct 2025), unlocking Klang Valley projects with cumulative GDV of RM738 million.
• Launches of Levia Puchong (3QFY26), Damansara (2HFY27), and Bandar Seri Impian 2 in Kluang (2HFY26), each expected to contribute ~10% to group revenue.

Industrial Land Sales: A Key Profit Driver

• Matrix has secured 2,382 acres in MVV Parcel B (1,382 acres completed in Oct 2024, 1,000 acres to complete in 2HFY26).
• 1,000 acres earmarked for industrial use: 20% managed industrial park, 20% built-to-sell factories, 50–60% industrial land plots.
• Current industrial sales: RM370 million (130 acres), mainly to local buyers in consumer, automotive, and oil & gas sectors. 40% of these sales (RM44 million) are expected to be recognized in FY26, contributing 17% to FY26 earnings (30% net margin assumption).
• Speed to market and title transfer completion are key to attracting more foreign and MNC buyers.

Klang Valley and New Projects: Unlocking Value

Post-acquisition of Horizon Group, Matrix will hold a 70% stake. This unlocks:

• A mixed development in Banting (terrace houses, commercial lots, apartments).
• A high-rise residential project in Kota Warisan (Horizon KLIA) with two towers and 1,130 SOHO units.

These projects are expected to deliver RM150 million per annum over the next 12 months.

Healthcare Segment: Small but Growing

• The healthcare segment contributed RM12.7 million (4% of group EBIT) in FY25.
• Growth projected at 10% per annum, supported by expanded bed capacity (from 97 to 109), consultant headcount (18 to 31), and operating theatres (2 to 3).

Financial Performance and Key Metrics

Valuation and Recommendation

• BUY maintained with a target price of RM1.70, representing a 22% discount to RNAV/share of RM2.18.
• Valuation implies 1.4x FY26F P/B and 12.4x FY26F PE (well above the 10-year mean P/B of 0.8x).
• Matrix stands out for its above-industry margins, strong ROE, and generous dividend payout (FY25: 54.4%).
• Dividend yield of 5–6% provides a defensive investment option amid market volatility.

ESG Initiatives and Corporate Governance

• Environmental: d’Tempat Country Club achieved Gold Standard (Provisional) on the Green Building Index.
• Social: RM15.3 million contributed to CSR in FY25.
• Governance: Strong transparency, with robust anti-bribery and anti-corruption policies. Matrix is rated BBB by MSCI ESG and is a member of the FTSE4Good Index Series.

Key Risks and Market Conditions

• Competitive industrial park landscape with new supply from NCT Smart Industrial Park (Sepang), Sime Darby Property’s Vision Business Park, and Eco World’s Eco Business Park 7.
• Management guides for FY26 revenue and PATMI of RM1.55b and RM260m, with a net margin of 16.8% (down from recent years due to geographic expansion).
• Industrial plot sales in MVV, expected to yield 30% net margins, are crucial to offsetting lower margins from outside Negeri Sembilan.

Conclusion: Matrix Concepts – A Strong Buy for Growth and Yield

Matrix Concepts is strategically leveraging its core strengths in Negeri Sembilan while aggressively expanding into new regions and segments. With robust industrial and residential pipelines, strong dividend yields, and a solid ESG framework, Matrix offers a compelling investment opportunity for investors seeking both growth and income in Malaysia’s property sector.