Affin IB Research maintains Buy on IJM Land, target price RM3.77

Affin IB Research maintains Buy on IJM Land, target price RM3.77
Business & Markets 2013
Written by Jeffrey Tan of theedgemalaysia.com
Friday, 20 September 2013 10:31

KUALA LUMPUR (Sept 20): Affin Investment Bank Research has maintained its buy Rating on IJM Land Holdings Bhd at RM2.66 with an unchanged target price of RM3.77, and said it favoured the company for its strong management, good brand equity and good geographical diversification.

The research house said this in a report on Friday after the IJM Land’s purchase of land worth RM188 million from FCW HOLDINGS BHD [].

Yesterday, IJM Land announced that it had entered into a Shareholders’ Agreement with FCW to form a 50:50 joint venture (JV) company to undertake a mixed development project on the above-mentioned land.

Affin IB Research analyst Isaac Chow said he was is neutral on the JV and land acquisition.

He said the company’s earnings forecast was retained for now, pending completion of the transaction and further details on the Segambut development project.

Chow said the acquisition price of RM280 psf is comparable to the RM270 psf paid by UOA Development recently for an 11-acre piece of freehold land in Jalan Ipoh.

“However, it is higher than the RM135 psf paid by Mah Sing for a leasehold land in Taman Wahyu,” he said.

Chow said he likes IJM Land for its strong management, good brand equity and good geographical diversification.

“We also commend the property developer’s excellent product mix, impressive 31% earnings compound annual growth rate over FY13-16E and undemanding valuation,”said Chow.