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Published: Wednesday September 12, 2012 MYT 11:11:00 AM

IJM Land slips, RHB Research keeps Outperform

KUALA LUMPUR: Shares of IJM Land slipped in late morning trade on Wednesday in line with the cautious market sentiment despite upbeat outlook for the company from analysts.

At 10.55am, it was down four sen to RM2.17. There were 145,700 shares done at prices ranging from RM2.17 to RM2.21.

The FBM KLCI fell 1.01 points to 1,613.23. Turnover was 204.39 shares valued at RM341.67mil. There were 252 gainers, 203 losers and 245 counters unchanged.

On Tuesday, IJM Land inked a 40:60 JV deal with Amona Development to develop a parcel of 57.8-acre leasehold land at Kerinchi/Pantai Dalam area. Amona Development is the registered owner of this land parcel under its privatisation agreement with DBKL.

A total of RM331m is payable in six months' time to DBKL. The amount includes the land cost and minimum guaranteed profit as well as the cost of building an access to NPE (pre-approved). DBKL will still have a 20% share of the excess profit.

RHB Research expects IJM Land to raise some borrowings to meet the funding commitment.

"Although IJM Land's share price has been bashed down in line with the broad equity market correction, fundamentally IJM Land still stands out among the top property peers.

"We think IJM Land best represents the Malaysia property market, as the risk profile of SP Setia has substantially changed following its giant step into a new market in London.

"We continue to like IJM Land. After imputing the GDV into our RNAV estimate, our fair value is raised to RM2.89 (from RM2.80), based on an unchanged 15% discount to RNAV. We reiterate our Outperform call on the stock," it said.

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