Affin IB keeps “buy” call on IJM Land after Asas acquisition

Business & Markets 2013
Written by Ahmad Naqib Idris Adzman Shah of theedgemalaysia.com
Friday, 06 December 2013 12:50
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KUALA LUMPUR (Dec 6): Affin IB maintains its “buy” call on IJM Land Bhd at
its current price of RM2.72, with a target price (TP) of RM3.20, after IJM Land
Bhd’s acquisition announcement yesterday.
Yesterday, IJM Land announced the acquisition of 60% of shares in Asas
Panorama Sdn Bhd, which had entered into 67 conditional sale and purchase
agreements for 67 parcels of land in Kuantan.
“Asas Panorama intends to develop the land into a mixed development project
with a primary focus on industrial development,” said Affin IB.
IJM Land said the development will commence in 2014 for a period of 10 years
with an expected GDV of RM1.4 billion.
Affin IB said that they are positive on the land acquisition venture, as the land is
located near Kuantan Port and recently, the Malaysia-China Kuantan Industrial
Park (MCKIP) was launched near the port.
It added that the acquisition price of RM10 psf is also close to market value,
and that the acquisition enables the group to diversify its property development
portfolio, which is currently focused on residential and commercial
developments.
“We continue to like IJM Land for its strong management, good branding and
strategic land bank.
“Relative to other listed peers, we believe IJM Land’s property sales will be
more resilient to the near term property market slowdown given their focus on
townships/mass market housing developments and good geographical
diversification,” said the research house.