RHB Research retains ‘neutral’ rating on I-Bhd

PETALING JAYA: RHB Research Institute has initiated coverage on I-Bhd on the back of the property developer’s future developments worth gross development value (GDV) of RM6.7bil and launches in the pipeline.

The research firm, in its published note, reiterated a “neutral” rating on the stock with a target price of 50 sen based on a 60% discount to revalued net asset valuation.

RHB said over 90% of I-Bhd’s earnings and portfolio GDV stemmed from i-City, its 72-acre flagship project in Shah Alam.

“The project is the company’s key sales driver and its single largest exposure to the group,” RHB noted.

RHB’s report indicated that as of June, of the total GDV of RM9.5bil for i-City, RM1.7bil has been sold out with another RM1.1bil allocated or property investments. The remaining RM6.7bil will be for future developments.

The house projected I-Bhd’s earnings to be lower next year due to a slow take-up rate in 8Kia Peng.

“Launched early last year, 8Kia Peng, is I-Bhd’s only project outside i-City and this is not well-received.

“The take-up rate is only at 8% currently, while construction progress has reached 20%,” RHB said, adding that the project is slated for completion in 2019.

According to RHB, I-Bhd gave the assurance that the company’s cash balance and incoming cash flow was sufficient to cover the remaining construction cost of the RM270mil project.

On a positive note, demand for I-Bhd’s RM250mil GDV Hill 10 Residence was healthy due to the upcoming mall, Central Plaza @ i-City.