IOI Properties set to launch Xiamen 2 project next month

Source: The Star
IOI Properties set to launch Xiamen 2 project next month


KUALA LUMPUR: Given that China’s situation has improved with economic activities resumed, IOI Properties Group Berhad confirms that it intends to launch its Xiamen 2 project worth RMB800mil (about RM489mil) next month, which comprises of high-rise residential and landed units, according to AmBank Research.

As of mid-March, the research house said economic activities have resumed with capacity picking up.

During its recent engagement with IOI Properties, the research house also noted that Xiamen 3 is expected to launch in the later part of this year. Both Xiamen 2 and Xiamen 3 are projects in China.

In Malaysia, the group may consider to reduce its sales target as it assesses the local property market in the wake of the Covid-19 pandemic.

AmBank Research said IOI Properties’ management has stressed that work shifts of construction jobs would need to increase to clear backlogged work post-movement control order.

However, the research house makes no changes to IOI’s its financial year ending June 30,2020 (FY20) to FY22 earnings forecast.

Previously, it has cut its earnings forecasts by 6.1% and 5.9% for FY20 and FY21 respectively to reflect the impact of movement control order (MCO) and its spillover effects to the economy, which could result in lower revenue recognition.

In the long run, AmBank Research believes the group remains stable, supported by positive contribution from its property development projects and steady income from its property investments.

“We view the recent selldown on the stock as a buying opportunity with a potential upside of about 50%, hence we are maintaining our buy recommendation.

“We maintain our ‘buy’ recommendation on IOI Properties with an unchanged fair value of RM1.52.

“This is based on sum-of-parts (SOP) valuation. We make no changes to our financial years 2020 to 2022 net earnings forecasts, ” it said.