Stock Name: IJMLAND
Company Name: IJM LAND BERHAD
Research House: AMMB

IJM Corporation Bhd
(Oct 14, RM2.68)
Maintain buy with fair value at RM3.88: We raise our fair value from RM3.60 per share to RM3.88 based on an unchanged 10% discount to our revised fully-diluted (FD) NAV of RM4.31 per share, which takes into account an estimated accretion of 31 sen per share (50% stake) from the acquisition of 2,000 acres of land at Canal City (GDV: RM6.5 billion).

The acquisition price of about RM5 psf is very attractive. Payment will be staggered over four years.

The maiden launch is expected to be in 4Q11.

The deal will give it a strong foothold in the lucrative township development in the Klang Valley.

The recent tender by the Penang government for 93 acres at Bayan Mutiara for RM200 psf may establish a new benchmark price for seafront land.

This may lead to a repricing of implied land values at Phase II (103 acres) of The Light, which should cost less than RM50 psf to reclaim.

The imminent debut of Light Collections II (GDV: RM260 million) next month is highly anticipated.

IJM Land is actively negotiating with anchor investors to pre-commit on its highly sought-after waterfront retail mall (GFA: 1.0msf) at Phase II.

Presales in the first six months of this fiscal year have reached RM900 million.

IJM Land looks likely to surpass its presales guidance of RM1.2 billion given its presales pipeline of a further RM700 million until end-FY11F. Unbilled sales now stand at RM1.1 billion.


This article appeared in The Edge Financial Daily, October 15, 2010.