I-Bhd in prime position to benefit from urbanisation of the outer Klang Valley

KUALA LUMPUR: Despite the challenges in the property market, I-Bhd is in prime position to benefit from the urbanisation of the outer Klang Valley region. 

PublicInvest Research, which reaffirmed its outperform call on the stock, on Tuesday said the company’s value proposition is attractive and continue to like it for its prime position in benefitting from the urbanisation of the outer Klang Valley region (Klang and Shah Alam) despite on-going challenges in the property market. 

“Pace of sales this year has matched last year’s, showing no discernible slowdowns as yet, a testament to the market segment it serves which is still seeing demand. With only about
15% of its Gross Development Value (GDV) crystallised, I-Bhd’s story is only just unfolding. 

“Our outperform call is reaffirmed, while we raise our target price to RM0.91 (from RM0.73 previously), as we narrow our discount to revalued net asset value (RNAV), from 60% previously to 50%, with the company continuing to deliver consistently. We see scope for upgrades in the future,’’ it noted.

Commenting on the third quarter (Q3 16) results, the research house said though only making up 61.6% of its full-year estimates, the brokerage deem the results broadly in line as it anticipate stronger recognition in the final quarter to bring numbers in-line. 

I-Bhd reported another set of strong quarterly numbers, underpinned by  growing contributions from its property development segment, which remains on track to achieving its medium term goal of generating a steady-state revenue of RM500mil per annum.  Q3 16  net profit grew 159.3% year-on-year (y-o-y) to RM22.4mil, contributing to a cumulative nine months net profit growth of 91.6% y-o-y to RM52.4mil.

While sales numbers of 8Kia Peng at KLCC have been relatively anemic, PublicInvest  expect an improvement in market conditions next year to lift contributions. The i-SOHO and i-Suite developments have been fully sold while the Liberty and Parisien Towers projects (launched in 2015) have achieved more than 80% sales, contributing to Q3 16 revenue of RM113.6mil (+105.7% y-o-y, +31.0% q-o-q) and cumulative nine months revenue of RM280.7mil  (+53.1% y-o-y). Unbilled  sales are an encouraging RM656.5mil, it added.

Slated for launch in 2017 is part of the “Central Towers” development, comprising an office tower and residential suite towers above the DoubleTree by Hilton hotel which it
has dubbed “Converse @ i-City” given its integration of Internet of Things functionalities. 

On this note, the brokerage said it views the company’s recent  partnership with Huawei Technologies positively as it works toward being at the forefront of incorporating technological advancements into its product offerings, which is looking increasingly to be the next wave in property development.