RHB Research maintains Market Perform on IJM Land, FV RM2.33

KUALA LUMPUR (Feb 20): RHB Research Institute is maintaining its market perform on IJM Land Bhd with a higher fair value of RM2.33.

It said on Monday the launch of 1,879-acre Canal City in 3Q2012 will rightly meet the sector’s switch to the middle-end housing. The gross development value could potentially be expanded to RM12 billion to RM15 billion, vs RM10 billion in its RNAV estimate.

“We are confident that Phase 1 (GDV RM250m) will be well-received, driven by: (i) limited new phases in established townships nearby; (ii) continued pent-up demand on mid-end housing, which banks are still supportive in their lending; and (iii) lack of sizeable self-contained new township development in the Klang Valley by reputable developer,” it said.

RHB Research revised up its GDV and margin assumption for Canal City. This results in an RNAV enhancement of 14 sen a share. Based on an unchanged 15% discount to RNAV, its fair value was raised to RM2.33.



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CIMB Research has technical buy on IJM Land at RM2.22

KUALA LUMPUR (Feb 3): CIMB Equities Research has a technical buy on IJM Land at RM2.22 at which it is trading at a price-to-book value of 1.4 times.

It said on Friday that IJM Land is still consolidating in a triangle pattern but it thinks the stock is ripe for a stronger rebound.

“Investors should join the bandwagon when the breakout takes place. Once the RM2.26 level is taken out, the following resistance targets are RM2.39 and RM2.50,” it said.

CIMB Research said the MACD was hovering near the zero level while RSI is above the 50pts mark. The candles are also trading above its 30-day and 50-day SMAs.

“Only a fall below RM2.12 would negate our bullish stance on the stock. Once RM2.08 is breached, the next support levels are RM1.98 and RM1.85,” it said.



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Chor: Local property mkt to see slight impact from eurozone downturn

KUALA LUMPUR (Jan 17): Housing and Local Government Minister Datuk Seri Chor Chee Heung is confident that the local property development will continue to thrive despite the economic slowdown that has currently impacted European countries.

He said the crisis would have a slight impact only on PROPERTIES [] that exceed RM1 million.

He said the property development in the country was mainly driven by local buyers and hoped that developers would build more affordable houses for Malaysians in conjunction with the government's 1 Malaysia policy.

"For developers undertaking affordable housing of between RM400,000 and RM600,000, there will be no shortage of takers," he told reporters after launching the "Malaysia Top Property Developers 2011/2012" coffee table book.

The 250-page coffee table book is available at MPH bookstores and some will be on sale in overseas markets.

The book focuses on the 36 top developers in Malaysia, among others, IJM LAND BERHAD [], Berjaya Land Berhad and Mah Sing Group Berhad.

Chor said his ministry would revive about 35 more abandoned housing projects throughout the country after having successfully done so with 35 others last year.

Meanwhile, the Chief Executive Officer of Malaysia Property Incorporated, Kumar Tharmalingam said Malaysia's property market, was different from that of Singapore.

"(In Malaysia) 98 per cent of the properties are sold to Malaysians and only two per cent to foreigners. This is in contrast with the Singapore property market that is targeting 30 per cent of sales to foreigners," he added.

He said Malaysian builders had very deep pockets and were able to manage the economic slowdown in sales by holding back launches while having had also paid for the land.

He predicted that this year the country would see less luxury projects launched, with the exception of established markets such as Iskandar Malaysia in Johor, the Klang Valley, Kota Kinabalu (Sabah) and Batu Ferringhi (Penang).

These he added, are foreign market oriented. - Bernama



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Kimlun edges up in early trade on landing new job

KUALA LUMPUR (Jan 17): Kimlun Corporation Bhd shares advanced on Tuesday after it landed a contract worth RM82.1 million to build two blocks of service apartment and ancillary buildings in Johor Bahru.

At 9.16am, Kimlun added four sen to RM1.36 with 117,000 shares traded.

The company said its unit Kimlun Sdn Bhd had accepted the letter of award from Ikatan Flora Sdn. Bhd, a sub-subsidiary of IJM Land Bhd for the contract.



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Stocks to watch: Proton, DRB-Hicom, Hovid, Bumi Armada, HeiTech Padu, Kimlun

KUALA LUMPUR (Jan 17): The strong corporate newsflow would provide excitement to the markets on Tuesday, despite the cloud of uncertainties from the eurozone.

Reuters reported European stocks were slightly higher in a choppy session on Monday, with weakness in banks after a mass credit downgrade of euro zone countries offset by a rise in defensives, such as pharmaceuticals.

Late on Friday, Standard & Poor's cut the ratings of Italy, Spain, Portugal and Cyprus by two notches and France, Austria, Malta, Slovakia and Slovenia by one notch each.

At Bursa Malaysia, the FBM KLCI fell below the 1,510- level in line with the overall weaker investor sentiment at key regional markets following Standard & Poor’s cutting the sovereign credit rating of nine of the euro zone's 17 countries.

The FBM KLCI fell 14.01 points to 1,509.06 in a broadly weaker market.

Stocks which could see trading interest area PROTON HOLDINGS BHD [], DRB-HICOM BHD [], HOVID BHD [], Bumi Armada Bhd, HEITECH PADU BHD [] and Kimlun Corp Bhd.

Proton and DRB-Hicom resume trading after a one-day suspension. As expected, Khazanah Nasional Bhd announced it was divesting its 42.72% Proton stake to DRB-Hicom for RM5.50 per share or RM1.291 billion cash.

Upon completion of the sale and purchase agreement, DRB-Hicom will be obliged to undertake a mandatory general offer on the remaining Proton shares.

Bursa Malaysia Securities has lifted Hovid Bhd from the Practice Note 17 status with effect from Tuesday.

Bumi Armada Bhd’s subsidiary, Bumi Armada Navigation Sdn Bhd has secured a RM155 million contract from Petróleo Brasileiro S.A. The contract was to provide one anchor handling towing support (AHTS) vessel to Petrobras in its hydrocarbon and mining activities in the Brazilian continental shelf.

HeiTech Padu has secured a RM63.60 million contract from Bank Simpanan Nasional for the latter’s proposed core banking system.

Kimlun Corporation Bhd has landed a contract worth RM82.1 million to build two blocks of service apartment and ancillary buildings in Johor Bahru. The company said its unit Kimlun Sdn Bhd had accepted the letter of award from Ikatan Flora Sdn. Bhd, a sub-subsidiary of IJM Land Bhd for the contract.

DAYANG ENTERPRISE HOLDINGS BHD [] has received an extension of its workboat contract valued at RM85 million from Nautika Sdn Bhd.



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Kimlun unit gets construction job worth RM82.1m

KUALA LUMPUR (Jan 16): Kimlun Corporation Bhd has landed a contract worth RM82.1 million for the CONSTRUCTION [] of two blocks of service apartment and ancillary buildings in Johor Bahru.

The company said on Monday that its wholly-owned subsidiary Kimlun Sdn Bhd had accepted the letter of award from Ikatan Flora Sdn. Bhd, a sub-subsidiary of IJM LAND BERHAD [] for the contract.

It said that the construction work was expected to be completed by May 2014.

Kimlun said the project was expected to contribute positively to its earnings for the current financial year ending Dec 31, 2012 and the subsequent financial years during the contract period.



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IJM Corp registers lower Q2 pre-tax profit

IJM Corp Bhd's pre-tax profit for the second quarter ended Sept 30, 2011 fell to RM161 million from RM194 million in the same quarter 2010.

Revenue rose to RM1,097 million from RM785 million, the company said in a filing to Bursa Malaysia today.

In a separate filing, IJM Land Bhd said its pre-tax profit for the second quarter rose to RM57 million from RM41 million on a higher revenue of RM294 million from RM212 million.

The better results were mainly due to improved work progress from the group's on-going projects as well as the completion of the sale of some commercial land parcels in Seremban 2 in the immediate preceeding quarter, it said.

Meanwhile, IJM Plantations Bhd's pre-tax profit for the second quarter fell to RM62 million from RM64 million though revenue increased to RM180 million from RM133 million. -- Bernama



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RHB Research underweight on property sector

KUALA LUMPUR (Nov 21): RHB Research Institute said the property sector’s fundamentals remain weak.

It said on Monday, the prolonged sovereign debt crisis in the EU countries has overshadowed the global economic outlook next year.

“Therefore, property sales are likely to taper off (after a 21% growth in 2010) with a growth of 0%-5% in 2012, given that it is highly driven by GDP growth,” it said.

RHB Research said from its recent conversation with developers, potential buyers are indeed taking longer time in their property buying decisions than previously, especially on premium PROPERTIES []. Mass housing will continue to fare better due to pent-up demand.

“Although we have recently upgraded UEM Land to Trading Buy and Mah Sing to Market Perform, we maintain our Underweight stance on the sector. Our stock pick is selective.

“Over the short-term, we foresee UEM Land to benefit from more O&G-related news flow in Iskandar, while IJM Land’s share price could be supported by potential M&A angle following the recent offer made by PNB to SP Setia,” it said.

RHB Research said as expected, further regulations were imposed on household financing that will have an impact on the property sector.

“In our view, the guidelines issued by BNM do not come with reinforcement. This means the banks will still have flexible options in their credibility assessment,” it said.

The research house said that based on its checks, some banks are already assessing potential borrower’s net salary in their evaluation process.

RHB Research said having said, the banks are likely to tighten their lending on home mortgages gradually going forward, as signaled by BNM.

“While the immediate impact will not be seen until 1H2012, we believe the high-end segment will be more sensitive to regulatory tightening as financing availability gets narrower. Based on our sector report dated Sept 5, 2011, the stricter lending rules are likely to result in 11%-37% decrease in affordability,” it said.



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