IGB Berhad’s (IGB) losses narrowed to RM8.0m in 1QFY21 from RM10.4m a quarter ago, with its main assets still struggling due to pandemic restrictions though partially supported by disposal of a piece of land in Bentong. The results were below our expectations. While we believe its overseas assets could see some recovery in the next few quarters, its local assets could take longer than expected to normalize until domestic vaccinations gain more traction in 2H2021 given the full MCO announced over the weekend. We revise FY21 earnings estimate downwards by 61% given the latest negative development on the lockdown. Elsewhere, the proposed listing of its commercial assets has already been approved while other new ventures such as 18@Medini (a mixed development in Iskandar Malaysia), mixed-use development project in Bangkok (6 acres) and the offer for the 1.9-acre land in London are now put on hold due to the current difficult market conditions. All told, we maintain our Outperform call with TP of RM3.45 however, pegged at c.65% discount to our RNAV estimates as we still believe in the long-term attractiveness of its assets. Key catalyst near term is the proposed listing of its commercial assets and also potential sale of its non-core assets.
Source: PublicInvest Research - 31 May 2021