IJMLD has announced a 50:50 JV with FCW Holdings to undertake a 15-acre  freehold  mixed  development  along  Jalan  Segambut.  The  total consideration  of  MYR188m  translates  into  a  land  cost  of  MYR280  psf, which  we  deem  reasonable,  considering  the  plot  ratio  of  4.0x.  The project has a GDV of MYR1.5bn. Given the incremental value to RNAV, our FV is raised slightly to MYR3.70 (from MYR3.66). Maintain BUY.

- New  JV.  IJMLD  has  entered  into  a  50:50  JV  with  FCW  Holdings  to undertake a mixed development on 15.4 acres of freehold land at Jalan Segambut, Kuala Lumpur. The land is currently zoned for industrial use. The  total  consideration  of  MYR188m  translates  into  a  land  cost  of MYR280 psf, which we find reasonable given the location as well as the approved  plot  ratio  of  4.0x.  FCW  is  a  sister  company  of  Goh  Ban  Huat  (GBH MK, NR).

- MYR1.5bn project. The land is strategically located at the intersection of Jalan Segambut and the DUKE Highway, next to Sungai Keroh and near the  Segambut  KTM  station.  It  is  also  close  to  established  residential areas  such  as  Sentul,  Hartamas,  and  Mont’ Kiara.  The  land  will  be developed into a mixed development project. The current going price for properties in the area is about MYR600-650 psf. Given the location, we expect the project to be well-received.

- Forecasts. We make no changes to our forecasts. The project will likely be  launched  in  late  2014,  in  view  of  the  time  required  to  complete  the land transaction and convert the land status.

- Maintain Buy. Given the positive contribution to our RNAV estimate, our FV is raised to MYR3.70 (from MYR3.66), on par with the stock’s RNAV per  share.  This  is  in  line  with  our  valuations  for  the  sector  leaders. We continue  to  like  IJMLD’s wide  geographical  presence  and  diversified product  offering,  which  makes  it  a  good  proxy  to  Malaysia’s  property sector.  The  company’s  strong  balance  sheet,  prudent  landbanking strategy  and  well-designed  products  underpin  its  solid  fundamentals. 
The stock is our Top Pick in the sector.

Source: RHB