IOI Properties misses expectations on lower-than-expected billings

KUALA LUMPUR: Kenanga Research said IOI Properties Group Bhd's FY18E core net profit of RM661mil missed expectations, stemming from lower-than-expected billings an development margins. 

"IOIPG recorded RM1.88b (-34% YoY) sales for the year, which missed our FY18E target of RM2.21b," it said in its Tuesday report.

FY18 core net profit was down 30% year-on-year, in tandem with group revenue declining 33% and losses stemming from its associates/JCE. 

The research house reduced FY19E core net profit by 17% after house-keeping given the lower FY18 sales achieved, and cut FY19E sales target by 15% to RM2.05bil. It also introduced a FY20E sales target of RM2.13bil and corresponding financial estimates.

"Unbilled sales have dropped to a record low of RM648m, which provides less than a year’s visibility; however, this is likely to pick up once its China projects are launched given the high completion levels," it said.

Kenanga maintained market perform with an unchanged target price of RM1.70.