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NewsMaybank IB downgrades IOI to “sell”, cuts TP after demerger
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Maybank IB downgrades IOI to “sell”, cuts TP after demerger
by Cals Mon 06 Jan 2014, 14:51
| Maybank IB downgrades IOI to “sell”, cuts TP after demerger |
| Business & Markets 2013 |
| Written by Ahmad Naqib Idris Adzman Shah of theedgemalaysia.com |
| Monday, 06 January 2014 11:13 |
KUALA LUMPUR (Jan 6): Maybank Investment Bank Bhd has downgraded IOI Corporation Bhd (IOI Corp) to “sell” and reduced its target price (TP) to RM3.95 from RM5.42, saying the stock lacks a re-rating catalyst after its demerger exercise.
The research house said that the spin-off of the group’s property arm, IOI Properties Group, will leave IOI Corp as a pure integrated plantation player without a property development angle.
“The remaining plantation land bank post- demerger does not have any property development potential in the near term.
“Those strategic land banks with property development potential now reside with the soon-to-be-listed IOI Properties Group,” said the research house in its note.
Besides that, the research house expects IOI’s fresh fruit bunch (FFB) output to grow 3.8% for FY13 to FY16, which “lags in comparison” to other stocks under Maybank IB’s coverage.
The research house has also cut its earnings forecast for the group for FY14, FY15 and FY16 by 15%, 33% and 34% respectively to reflect its pure plantation earnings together with contributions from Unico-Desa Plantations Bhd, following the latter’s successful take-over by IOI Corp.
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