PETALING JAYA: PublicInvest Research continues to like I-Bhd ’s value proposition and i-City’s attractive location and still see it being in a prime position to benefit from the urbanisation of the outer Klang Valley region.
The research house said infrastructure-related projects such as the Light Rail Transit 3 (LRT3) and the Bus Rapid Transit (BRT) in the vicinity bodes well for the longer-term value enhancement of I-Bhd’s development given the Transit-Oriented Development (TOD) status.
“The ease of connectivity with other major points of commerce within a 20km radius will greatly enhance the attractiveness of and livability in i-City,” it said.
Commenting on its financial results, PublicInvest Research said I-Bhd’s first-quarter financial year 2017 (FY17) net profit of RM18.6mil on the back of RM102.8mil revenue only made up 21.5% of its full-year estimates.
The research house said it deems this broadly in line as it anticipates stronger earnings recognitions in subsequent quarters on the back of I-Bhd’s RM447.9mil unbilled sales.
It noted that while unbilled sales have fallen to RM447.9mil from RM573.3m as at end-2016, this is anticipated to be replenished with the launch of the company’s Hill10 Residences this financial quarter.
“Property development remains a clear mainstay of the group’s earnings, contributing RM22.2mil (+48.5% year-on-year, +3.3% quarter-on-quarter) or 92.5% of its pretax profit, underpinned by steady construction progress of its on-going developments,” it said.
“Property investment contributions are negligible at this point, though is well on track to achieving its RM1bil asset base by 2018 with about RM409.5mil spent to date. The first quarter is a seasonally low quarter for the leisure division, reflected by anaemic numbers registered,” it added.
PublicInvest Research said the i-SoHo and i-Suite developments are already fully sold, with handover to purchasers expected by the second quarter and fourth quarter of 2017 respectively.
While construction work on the Liberty, Parisien and Hyde Towers projects is on track and is likely to see more rapid progress once the car park podiums are completed, it said.
Moving forward, Hill10 Residences @ i-City which is situated above the DoubleTree by Hilton hotel is expected to be launched in the second quarter of 2017.
It is a RM120mil gross development value (GDV) project with 19-storeys of 204 fully-furnished residential units.
“Marketed as one of the most luxurious properties of its kind in Shah Alam, a successful sale of this project will be a watershed moment for property development in this neck of the woods given its benchmark pricing, and will strongly reinforce our belief in the eventual realisation of the remaining circa RM7bil GDV yet to be tapped on,” PublicInvest Research said.
The research house had maintained its outperform call on the stock with an unchanged target price of 91 sen based on a circa 50% discount to realisable net asset values.