Period  1Q14

Actual vs. Expectations  1Q14 core earnings of RM82m are within expectations, making up 29% of street estimates and 28% of ours.

 Turnover in 1Q14 was RM500m (+43% YoY) and is on track to meet our FY14E revenue target of RM2.2b. It was mainly driven by Rimbayu Phase 1, Saujana Duta@S2 Heights and its on-going township developments.

Dividends  None, as expected.

Key Results Highlights  YoY, core earnings were up by 154% on the back of higher billings and sales. EBITDA margins improved by 6.0ppt to 26.4% as the group recognizes higher margin projects such as The Light, Bandar Utama@Sandakan, Nusa Duta@Johor and its on-going township developments.

 QoQ, pretax profit was up 27% to RM121m for similar reasons quoted above.

Outlook  The group is targeting to launch GDV up to RM3.0b of new and later phases of on-going projects, which includes 2 new phase of Rimbayu, Seri Riana 2b, Pantai Central Park, Seri Binjai@Seremban, a condominium project in JB City Center, The Light Collection IV. The company is also aiming to launch their Royal Mint Street, London project (GDV: RM1.0b) in Sep-13.

Change to Forecasts  No changes to estimates. Note that FY14 includes a one-off (non-cash) net gain of RM231m arising from its Rimbayu project becoming a 60% subsidiary as opposed to the previous 50% JCE. Its unbilled sales of RM2.0b (incl. JVs) provide one-year earnings visibility.

Rating   Maintain OUTPERFORM

Valuation  Maintain TP of RM3.57 which is on parity to its FD RNAV of RM3.57. IJMLAND has c. RM5.2b GDV worth of Johor projects relative to their FY14E sales of RM2.2b and ‘affordable’ housing schemes such as Rimbayu, Seremban 2 and Shah Alam 2. We view these segments as strong demand drivers which will help the group secure, if not, exceed sales targets. As a net cash entity with relatively lower sales base effect vs. other sizeable developers, we believe IJMLAND is best equipped to weather uncertainties and achieve healthy earnings growth.

Risks  Unable to meet sales targets. Delays in launches.

Sector risks, including severe negative policies affecting property buyers/investors.

Source: Kenanga