AMINVESTMENT Bank Research has maintained its buy call on IOI Properties Group Bhd with an unchanged fair value of RM1.52 based on sum-of-the-parts (SOP) valuation due to the company’s stable long-term outlook.
“We reckon that the long-term outlook for IOI Properties remains stable, anchored 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,” the research house said in a note on April 29.
It has also made changes to IOI Properties FY20-22 earnings forecasts at this juncture.
“To recap, we have cut our FY20-21 earnings forecasts by 6.1% and 5.9% respectively in our previous sector report dated April 9, to reflect the impact of the movement control order (MCO) and its spillover effects on the economy which may result in lower revenue recognition,” it said.
Meanwhile, IOI Properties stressed that post-MCO, work shifts of construction jobs will need to be increased to clear backlogged work due to the MCO. The company is still assessing the local property market and may consider reducing its sales target.
At 10.105am, the counter was trading at RM1.01, down a sen from yesterday’s close, giving the company a market capitalisation of RM5.56 bil. — April 29, 2020
