We maintain our BUY rating with a revised FV of MYR3.66. FY14 will be an  exciting  year  for  IJMLD,  as  management  is  bringing  forward  many launches,  including  the  debut  of  Pantai  Sentral  Park  and  its  London project. Upcoming 1Q14 numbers are expected to be strong due to the handover of some projects. The recent acquisition of an additional 10% stake in the hot-selling Rimbayu also adds value to the company. 
 
- FY14  to  be  an  exciting  year.  IJMLD  is  bringing  forward  many  new launches this year. About MYR3bn worth of projects will be rolled out in FY14. Key projects include: i) Phases 2 and 3 of Bandar Rimbayu (Kota Kemuning),  ii)  Collection  IV  of  The  Light  (Penang),  iii)  Seri  Binjai (Seremban), and iv) The Epic @ Taman Tasek (Johor Bahru). It will also debut  the  highly-anticipated  Pantai  Sentral  Park  as  well  as  its  London project.  We  expect  encouraging  demand  for  these  projects.  Already, non-Bumi  units  in  Phase  2  of  Rimbayu  were  sold  out  not  long  after  the presale. Our MYR2.3bn sales target will, therefore, be achieved easily.   

- Expect  strong  1QFY14  earnings.  IJMLD  will  announce  its  1QFY14 results  on  27  Aug.  Unlike  the  historical  trend,  where  1Q  is  typically  the weakest  quarter,  1QFY14’s  numbers  are  expected  to  be  strong  – showing q-o-q and y-o-y improvement – as Collection I was handed over in  June.  Meanwhile,  1QFY14  property  sales  are  estimated  at  MYR500-550m, mainly contributed by Rimbayu.

- Raising  stake  in  Rimbayu.  Recently,  IJMLD  increased  its  stake  in Rimbayu by 10% to 60%. We are positive on this, as the acquisition will not  only  bump  up  its  RNAV,  but  will  also  enable  the  company  to consolidate  the  earnings  contributions  from  this  project.  As  such,  our FY14-15 earnings forecasts are raised by 4-19%.

- FV  raised  to  MYR3.66.  Having  a  Neutral  call  on  the  sector,  we  are selective  on  our  stock  picks.  For  sector  exposure,  we  encourage investors to stick with developers with solid fundamentals – IJMLD is one of them. Based on management’s prudent selection of pipeline projects, which are mainly townships and high-rises located in matured areas that will  see  sustainable  demand,  sales  are  expected  to  grow  steadily.  Our FV  is  revised  up  to  MYR3.66  (from  MYR3.55)  as  a  result  of  the acquisition of an additional 10% stake in Rimbayu. Reiterate BUY.

Source: RHB