Period  1Q15

Actual vs. Expectations 1Q15 core net profit of RM74.7m is broadly within expectations, at 19% and 20% of street and our full year estimates, respectively. We expect billings to pick up in subsequent quarters while 1Qs are typically softer quarters.

 Property sales for the quarter hit RM450m (-10% YoY) and was mainly driven by its Malaysian ongoing projects. Sales achieved is on track to meeting our target as it makes up 20% of our FY14E sales (Malaysia) assumptions of RM2.2b.

Dividends  None, as expected.

Key Results Highlights

 QoQ, 1Q15 revenue dipped by 32% while core earnings fell by 21% because of previous quarter’s high base effect. Recall that 4Q14 saw: (i) betterthan- expected billings and development margins due to delivery of two Penang projects and (ii) Rimbayu becoming a 60% subsidiary (previously 50% JCE). Balance sheet remains very healthy at

0.04x net gearing.  YoY, core earnings saw marginal decline (-1%) because of EBIT margin compressions by 1.7ppt. The quarter saw high operating expenses arising from preliminary project planning costs and higher A&P cost as the property development scene has become increasingly challenging.

Outlook  Currently, IJMLAND is undertaking the valuation of its properties, which is required to be cleared by Bursa/SC before issuance of the Independent Advise Letters to shareholders. The valuation of the properties is taking slightly longer due to some of their overseas projects. The group hopes to hold the EGM before Dec-14 (refer overleaf for timeline). We expect a smooth privatisation process as the market has generally advocated an “Accept Offer” recommendation.

 Going forward, new project launches include Pantai Sentral (Phase 1), Rimbayu Phase 4 (terraces) and Sebana Cove.

Change to Forecasts    No changes to estimates. Unbilled sales of RM2.0b (including UK project) provide one year visibility.

Rating Maintain ACCEPT OFFER

Valuation  No changes to our TP which reflects the Offer Price of RM3.55. Note that the Offer Price comprises 0.5

IJMCORP share plus 20 sen cash payment for every 1 IJMLAND share.

Risks to Our Call     Unable to meet its sales target. An up-cycle in Singapore’s property sector. Sector risks, including further negative policies.

Source: Kenanga