Maintain NEUTRAL, new TP of MYR0.53 from MYR0.57, 4% upside. We lift our discount to RNAV of 60% from 55%, on the still-uncertain outlook of the property market. We recently organised a presentation made by IBHD’s representative to RHB remisiers and dealers. Management still expects to see earnings growth this year, given unbilled sales of MYR305m. Meanwhile, construction progress of Central Plaza @i-City is slightly behind schedule – it is now expected to be launched in Jan 2019.

Still expecting earnings growth. We recently organised a presentation made by IBHD’s management (represented by non-executive independent director Mr Ooi Hun Yong) to RHB’s remisiers and dealers. During the session, management said it believes earnings should still grow this year, driven by launches already held on its Plot 2 development, ie the Liberty, Parisien and Hyde projects.

50% to be developed up to 2025. Of its 72 acres of land in Shah Alam, 50% has been developed. The balance is still under construction, and carries a total remaining GDV of MYR6bn. Overall, the development of i-City – expected to be completed by 2025 – will feature residential, commercial and leisure properties within a single location. Management is not actively looking for landbanking opportunities and will remain focused on i-City. It also exploring opportunities to expand i-City’s GDV by buying surrounding land, re-developing low-rise areas, and transforming the project into a transit-oriented development.

Central Plaza @i-City might be slightly delayed. Management said it may postpone the opening of Central Plaza @i-City mall. The mall, jointly developed with Thailand’s Central Pattana (CPN TB, BUY, TP: THB95.00) with a 60:40 stake, was originally slated to be launched in 4Q18. However, we understand that construction works are slightly behind schedule – so it will likely be opened only in Jan 2019. Management is confident that the mall will be able to attract quality tenants, as Central Pattana has >30 years of experience in retail development. Currently, the mall has a committed occupancy rate of c.70%, and IBHD aims to hit 85% before the launch date. Anchor tenants include Sogo, Village Grocer and TGV.

Pipeline launches. Next year, management expects to launch Hill 11 residence (GDV: MYR278m), Hill 12 residence (GDV: MYR281m) and smart offices (GDV: MYR230m). Meanwhile, its other investment properties – Technology Office Tower (261,000 sqf) and a 2,000-seat convention hall – are also expected to be completed in late 2019.

Maintain NEUTRAL. We maintain our earnings estimates but cut our TP to MYR0.53 (from MYR0.57, 6% upside) as the outlook for the property market will likely remain challenging, in view of policy uncertainties after the general election. Upside risks to our call include a sharp recovery of the property market due to positive changes in government policy, while reverse scenarios would represent downside risks.

Source: RHB Securities Research - 26 Sept 2018