IOI's briefing on unit relisting Tuesday

KUALA LUMPUR: IOI Corp Bhd, the country's
fourth-largest listed palm oil producer by acreage, is scheduled to hold
a briefing on Tuesday on IOI Properties Bhd.




The briefing is expected to focus on IOI Corp plan to relist the property unit on Bursa Malaysia.

Tan Sri Lee Shin Cheng, the executive chairman and founder of IOI Corp,
is expected to be present at the meeting. He is the single largest
shareholder of the company with a 44.8 per cent stake.

Lee,
who has a fortune valued at more than US$4 million (RM12 million), has
been a net accumulator of IOI Corp shares over the past six months.

Suspicion in the market is that while a relisted IOI Properties will
likely be the biggest property company in terms of profitability, the
real deal is to ensure that IOI Corp becomes a purely plantation play,
which in turn could enhance the company's long-term valuations





In March last year, IOI Corp's group executive director Datuk Lee Yeow
Chor said the company was mulling the possibility of relisting IOI
Properties. He reportedly had also implied that IOI Property might be
listed in Singapore.

Talk of the relisting gained traction
again when Dow Jones exclusively reported early this month that an
initial public offering for IOI Properties may take place as early as
this year.
IOI Corp's property division posted an operating profit
of RM140.5 million in the second quarter ended December 31 2013 compared
with RM146 million in the same period a year ago.

At the
group level, IOI Corp's earnings fell 8.1 per cent to RM531 million in
the second quarter from RM577.7 million a year ago on lower
contributions from its plantations business.

Last Friday, RHB
Research upgraded IOI Corp to "neutral" from "sell" with a higher fair
value of RM4.90, saying that better contributions from its property
division will help cushion earnings from the plantation business.

IOI Corp's property business is also picking up pace as a number of
projects have already been launched while several more are in the
pipeline in Singapore, the research firm said.

It also said a relisting of IOI Properties will enable investors to channel their investments in "a more focused manner".

Alliance Research, however, maintained its "sell" call on IOI Corp as it said the company is trading on rich valuations.

"We find IOI Corp unjustifiably rich as it trades at 20.7 times its
long-term average price-earnings of 16.2 times," wrote analyst Arhnue
Tan in an April 13 report.

IOI Corp took IOI Properties private for RM2.6 a share in 2009 in a deal valued at RM310 million.