24 May 2017 | 3QFY17 Results Review
Maintain NEUTRAL
IOI Properties Group Berhad
Higher than expected sales
Revised Target Price (TP): RM2.35
(Previously: RM2.34)
INVESTMENT HIGHLIGHTS
•
9MFY17 earnings ahead of expectations
•
Higher contribution from all division
•
New sales of RM2.2b in 9MFY17
•
Maintain Neutral with a revised TP of RM2.35
9MFY17 earnings ahead of expectations. IOI Properties Group
Berhad (IOIPG) 9MFY17 core net income of RM717.1m was above
expectations, meeting 86% and 84% of our and consensus full year
estimates respectively. The positive deviation is due to the higher-thanexpected property sales achieved from Singapore project and betterthan-expected margin.
Higher contribution from all division. Core net income for 9MFY17
increased 34%yoy to RM717.1m, driven by higher earnings contribution
from all division. Note that we have excluded one-off additional buyer
stamp duty with interest of RM163.9m incurred for Trilinq project in
Singapore in our core net income calculation. Operating profit of
property division climbed 11%yoy, primarily due to higher sales take-up
rate for Trilinq project in Singapore of >70%. Similarly, operating profit
of property investment division improved by 22%yoy, underpinned by
higher contribution from IOI City Mall and office segments. Meanwhile,
3QFY17 unbilled sales stood at RM1.49b (declined from 2QFY17’s
RM1.62b), providing less than one year earnings visibility to property
development division.
New sales of RM2.2b in 9MFY17. IOIPG achieved new property sales
of RM662m in 3QFY17 (2QFY17 new sales: RM795m). 43% of the new
sales were contributed by Singapore project, 41% contributed by local
projects, while the remaining 16% contributed by project in China. That
brought total new sales to RM2.2b in 9MFY17, ahead of our and
management full year sales target of RM2.3b. As such, we are revising
our full year sales target to RM2.6b.
Maintain Neutral with a revised TP of RM2.35. We revise upwards
our earnings forecast for FY17/18 marginally by 2.1%/2.4% after
assuming higher sales target. Our TP has been revised higher to RM2.35
from RM2.34, in line with higher sales expected from Singapore project.
Our TP is based on 40% discount to fully-diluted RNAV. While we expect
sales outlook for IOIPG to be stable, net gearing of IOIPG climbed to
0.64x in 3QFY17 post Singapore land tender. Hence, we maintain our
Neutral call on IOIPG.
RETURN STATS
Price (23 May 2017)
RM2.08
Target Price
RM2.35
Expected Share Price
Return
13.0%
Expected Dividend Yield
3.3%
Expected Total Return
16.3%
STOCK INFO
KLCI
1,767.17
Bursa / Bloomberg
5249/IOIPG MK
Board / Sector
Main/Properties
Syariah Compliant
Yes
Issued shares (mil)
5,506.15
Market cap. (RM’m)
11,452.78
Price over NA
2.14
52-wk price Range
RM1.84-RM2.46
Beta (against KLCI)
0.91
3-mth Avg Daily Vol
4.25m
3-mth Avg Daily Value
RM8.54m
Major Shareholders
Vertical Capacity Sdn Bhd
51.71%
Summervest Sdn Bhd
8.50%
MIDF RESEARCH is a unit of MIDF AMANAH INVESTMENT BANK
Kindly refer to the last page of this publication for important disclosures
MIDF RESEARCH
Wednesday, 24 May 2017
Investment Statistics
FYE June (RM m)
2014A
2015A
2016A
2017E
2018E
Revenue
EBIT
PBT
Net Income
Core Net Income
EPS (sen)
Core EPS (sen)
Net DPS (sen)
Net Div Yield
1,454
1,069
1,120
890
387
31.9
13.9
8.0
3.8%
1,906
1,006
1,130
891
574
25.8
16.7
6.0
2.9%
3,025
1,290
1,525
1,080
813
24.4
18.4
8.0
3.8%
3,197
1,043
1,165
857
857
19.4
19.4
6.8
3.3%
3,234
1,069
1,192
876
876
15.8
15.8
6.6
3.2%
Core PER
NTA/share
P/NTA
Core ROE
Core ROA
15.0
4.0
0.5
3.5%
2.6%
12.5
3.9
0.5
4.3%
3.1%
11.3
3.6
0.6
5.1%
3.6%
10.7
3.7
0.6
5.2%
3.7%
13.1
3.4
0.6
5%
4%
Source: MIDF Research
3QFY17 Results Summary
Quarterly Results
FYE June (RM’m, unless
otherwise stated)
3QFY17
Revenue
895.8
Core EBIT
326.5
Core PBT
344.5
Net Income
121.1
Core Net Income
264.3
EPS (sen)
2.7
Core EPS (sen)
5.9
Net DPS (sen)
0.0
NTA/share (RM)
4.0
Net Gearing (x)
0.6
Core EBIT Margin
36.4%
Core PBT Margin
38.5%
%YoY
39%
52%
60%
-55%
137%
-57%
124%
0%
11%
NA
NA
NA
Cumulative
%QoQ
-25%
-17%
-13%
-56%
-3%
-56%
-4%
N/A
10%
NA
NA
NA
FY17
2,990.1
980.1
1,019.9
584.2
717.1
13.2
16.2
0.0
4.0
0.6
32.8%
34.1%
%YoY
40%
31%
19%
-15%
34%
-25%
17%
0%
11%
NA
NA
NA
2
MIDF RESEARCH
Wednesday, 24 May 2017
IOIPG RNAV
Stake
Est remaining
GDV (RM m)
WACC (%)
Value (RM m)
Klang Valley Projects
16 Sierra, South Puchong
Bandar Puchong Jaya, Puchong
Bandar Puteri, Puchong
IOI Resort City, Putrajaya
Bandar Puteri Bangi, Selangor
Bandar Puteri Warisan, Sepang
100%
100%
100%
100%
100%
100%
2745
750
2837
19200
3450
1083
11%
11%
11%
11%
11%
11%
312
99
338
1185
411
142
Johor Projects
Bandar Putra Kulai, Johor
Bandar Putra Segamat, Johor
Taman Lagenda Putra, Kulai, Johor
Taman Kempas Utama, Johor Bahru, Johor
The Platino, Johor Bahru, Johor
i-Synergy, Senai, Kulai, Johor
100%
100%
100%
100%
100%
100%
1592
18
27
812
100
1720
11%
11%
11%
11%
11%
11%
151
3
4
102
13
205
Other States Projects
Desaria , Sungai Ara, Penang
Bandar IOI, Bahau, Negeri Sembilan
100%
100%
156
806
11%
11%
21
96
Singapore Projects
South Beach, Beach Road, Singapore
The Trilinq @ Jalan Lempeng, Singapore
Cape Royale @ Sentosa Cove, Singapore
Cityscape @ Farrer Park, Singapore
Seascape @ Sentosa Cove
50%
88%
65%
60%
50%
1667
1250
4500
1200
825
11%
11%
11%
11%
11%
109
144
283
77
54
China Projects
IOI Park Bay, Xiamen, PRC
IOI Palm City, Xiamen, PRC
100%
100%
419
2170
11%
11%
55
247
Unbilled sales
Subtotal
Remaining Landbank
Nusa Jaya
Mukim of Pulai
Segamat
Kulai Jaya
Ayer Keroh
Bandar IOI, Bahau
100%
100%
100%
100%
100%
100%
Investment Properties
100%
Total
Shareholder Funds
Total RNAV
Enlarged share base
Fully-diluted RNAV per share (RM)
Discount
Target Price (RM)
1500
16
1254
467
1338
745
186
4165
Net Surplus (RM m)
0
0
0
0
0
0
0
4237
17406.0
21643
5534.8
3.91
40%
2.35
Source: MIDF Research
3
MIDF RESEARCH
Wednesday, 24 May 2017
DAILY PRICE CHART
Jessica Low Jze Tieng
[email protected]
03-2173 8391
Source: Bloomberg
4
MIDF RESEARCH
Wednesday, 24 May 2017
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(Bank Pelaburan)
(A Participating Organisation of Bursa Malaysia Securities Berhad)
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MIDF AMANAH INVESTMENT BANK : GUIDE TO RECOMMENDATIONS
STOCK RECOMMENDATIONS
BUY
TRADING BUY
NEUTRAL
SELL
TRADING SELL
Total return is expected to be >15% over the next 12 months.
Stock price is expected to rise by >15% within 3-months after a Trading Buy rating has been
assigned due to positive newsflow.
Total return is expected to be between -15% and +15% over the next 12 months.
Total return is expected to be <-15% over the next 12 months.
Stock price is expected to fall by >15% within 3-months after a Trading Sell rating has been
assigned due to negative newsflow.
SECTOR RECOMMENDATIONS
POSITIVE
The sector is expected to outperform the overall market over the next 12 months.
NEUTRAL
The sector is to perform in line with the overall market over the next 12 months.
NEGATIVE
The sector is expected to underperform the overall market over the next 12 months.
5