IOI Properties’ FY23 property sales amounted to RM1.96bn. Despite the recent round of tightening measures, the Marina View project in Singapore worth RM8.5bn will be the major launch in FY24F.
“As such, we expect IOI Properties to rake in at least RM2bn sales in FY24F. We raise our TP to reflect better market sentiment ahead, given the lifting of the political overhang post state elections,” said RHB Research (RHB) in the recent Malaysia Results Review.
FY23 revenue for the property development segment was 11% lower YoY, largely due to weaker sales in China, but this was partially offset by stronger contribution from the Johor region.
The slower sequential growth in the property investment and leisure & hospitality divisions may be due to slower activities during Ramadan in April.
4QFY23 new property sales achieved RM590m vs RM443m in 3QFY23. Local projects contributed 85% of the full year sales of RM1.96bn, while the remaining 15% was made up from the China and Singapore projects.
Of the total RM1.67bn sales in Malaysia, the Klang Valley region contributed RM854.1m while Johor region generated RM772m. On a full-year basis, IOIPG managed to sell RM637.9m worth of unsold inventory. This brought the outstanding unsold inventory to RM2.41bn from RM3.05bn in FY22.
Management has remained tightlipped on the committed occupancy of its IOI Central Boulevard Office that is going to be completed by end-2023.
“However, we estimate the committed occupancy to have reached around the 50% level, which should be sufficient to offset the associated interest expense,” said RHB, maintaining the Buy rating and a Target Price of RM2.10.
For FY24F, pipeline launches should be robust, as Marina View, with a gross domestic value of RM8.4bn, is slated for launch in Oct 2023. This is in addition to the usual launches in the existing townships in Malaysia.
