IOIPG’s Key Segments Leading Growth For The Group
Hong Leong Investment Bank Bhd (HLIB) has maintained its BUY recommendation on IOI Properties Group (IOIPG) with an unchanged target price of RM4.15, citing strong first-quarter FY26 results and continued upside from its Singapore portfolio and Malaysian property developments.
The house noted a capital upside of 87.8% and an expected total return of 92.3%, supported by a 4.5% dividend yield.
IOIPG reported 1QFY26 core PATAMI of RM162.3 million, up 51.5% quarter-on-quarter and 117.3% year-on-year, accounting for 19.8% of HLIB’s full-year forecast and 26.0% of consensus expectations. HLIB attributed the results to the full consolidation of South Beach, recognition of a Melaka land sale and improving operating performance from IOI Central Boulevard.
Exceptional items in the quarter included a RM502.8 million gain on re-measurement of previously held interest in South Beach, partly offset by impairment, forex losses and PPE write-offs.
Revenue for 1QFY26 rose 8.8% QoQ, with property investment and hospitality segments leading the growth. The hospitality segment saw robust improvement due to the consolidation of JW Marriott Singapore and stronger performance from Malaysian hotels, boosted by the Malaysia Day long weekend.
Property development revenue grew 46.5% YoY, driven by higher sales across Malaysia and China, while core PATAMI benefited from lower finance costs despite a larger debt base following the South Beach acquisition.
In Malaysia, HLIB highlighted ongoing strong sales momentum in Johor across industrial and residential segments, supported by the strategically located Kulai landbank within the special economic zone.
The group expects to recognise net profit from the Melaka land sale in 3QFY26. IOI Industrial Banting commenced its priority preview in 1QFY26, ahead of the official launch in December.
On the investment side, IOI City Mall Phase 2 is completing its major rental renewal cycle by 2QFY26, while IOI Mall Damansara is improving in footfall, rental rates and occupancy, with profitability anticipated by 3QFY26. The hospitality segment is expected to benefit from Visit Malaysia Year 2026 and rising Chinese tourist arrivals.
Singapore assets, including IOI Central Boulevard, South Beach Tower, and JW Marriott Singapore, are expected to meaningfully lift group earnings from 2QFY26. IOI Central Boulevard achieved 95% committed occupancy and 70% physical occupancy as of October, positioning it for maiden profits. South Beach Tower currently reports 96% committed occupancy and 74% physical occupancy, while JW Marriott is set to benefit from the F1 weekend in October 2025.
HLIB maintained forecasts, underscoring IOIPG’s diversified exposure across Malaysia and Singapore as a compelling long-term proxy for property sector growth, combining defensive stability with growth opportunities.
As of 10.37 am, the stock price noted an increase of 2.26% to RM2.26.