IJMLD’s 1QFY14 results came in above  our  and  market  expectations. The  stronger  sequential  earnings  growth  was  mainly  attributed  to  the completion  of  Collection  I  in  June  this  year.  1QFY14’s  property  sales, which  amounted  to  MYR500m,  are  on  track  to  meet  our  forecast  of MYR2.3bn  given  the  number  of  projects  in  the  pipeline.  Maintain  BUY and MYR3.66 FV. 
 
- Above  expectations.  On  an  annualised  basis,  IJMLD’s  1QFY14 earnings  beat  ours  and  market  expectations.  The  strong  earnings  were due  to  the  increase  in  sales  in  the  previous  year  and  hence,  higher progress  billings.  The  key  projects  that  contributed  during  the  quarter included The Light, Bandar Utama Sandakan, Shah Alam 2, Seremban 2 and Nusa Duta.

- Pipeline  launches.  The  1QFY14  new  property  sales  amounting  to MYR500m were largely contributed by Phase 1 of Bandar Rimbayu. We expect  stronger  sales  in  the  coming  quarters  as  Phase  2  of  Rimbayu was fully sold during its preview last month.  The projects in the pipeline due  to  roll  out  include:  i)  Pantai  Sentral  Park  (Kuala  Lumpur),  ii)  Seri Riana Phase 2 (Kuala Lumpur), iii) Seri Binjai (Seremban), iv) Collection IV (Penang), and v) EPIC @ Taman Tasek (Johor Bahru), as well as the London  project.  Given  the  nature  of  these  products,  we  believe  IJMLD will be able to achieve our sales forecast of MYR2.3bn  for FY14 (FY13: MYR2bn).

- Forecasts.  We make no changes to our forecasts. IJMLD’s earnings over  the  next  two  years  will  be  underpinned  by  MYR1.4bn  (by  effective interest)  worth  of  unbilled  sales.  Vertiq  in  Penang  was  delivered  to buyers in July while Collection II will be handed over in December.

- Maintain BUY. We maintain our BUY rating,  with our FV unchanged at MYR3.66, on par with the stock’s RNAV per share. Although the regional economic  outlook  is  becoming  increasingly  challenging,  we  believe IJMLD’s property sales will be relatively stable since the demand for the products  in  its  pipeline,  which  are  mainly  townships  and  high-rise projects in mature areas, are expected to be sustainable. 

Source: RHB