RHB Research has maintained a “Buy” recommendation for IOI Properties at a target price of RM1.38. It said that despite the stable earnings growth, IOI Properties did not enjoy a sustainable share price recovery like its peers.
The stockbroking firm said that value has emerged given the increasing stream of recurring income, especially upon the completion of Central Boulevard next year. “The company is also a beneficiary of the reopening of the economy as earnings from its property development and property investment should normalise back to pre-pandemic levels,” it said.
RHB said that management expects property sales in Malaysia to be softer in the January-March quarter given the expiry of the Home Ownership Campaign in Dec 2021.“However, China projects will likely be the key contributor to property sales in 2HFY22, as about MYR960m worth of properties were launched in Xiamen/Xiang An in December last year,” the stockbroking firm said.
The stockbroking firm said that Phase 2 of the mall (NLA 1.1m sqf) is slated to open in June/July. Committed tenancy for the mall has reached >70%, including four anchor tenants. “We estimate that Phase 2 should contribute about MYR30-40m pa in rental income (assuming 75% occupancy) during the initial years of operation,” it said.