Review

• Ibraco posted a 9M24 net profit of RM26.8mn, achieving 63% of our fullyear forecast. We consider this performance within expectations, as we anticipate a significantly stronger 4Q driven by accelerating construction progress in both its property development and construction segments.

• YoY. 9M24 net profit fell 26% to RM26.8mn, primarily impacted by weaker contributions from the property development and quarry divisions, coupled with higher administrative and sales expenses as well as increased interest costs.

• QoQ. 3Q24 net profit soared to RM15.3mn, more than doubling 2Q24’s RM6.2mn, reflecting a robust sequential rebound. The strong performance was mainly attributed to improved results in both the property development and construction segments, driven by accelerated progress on new projects.

• The board has declared an interim dividend of 2.0 sen per share, up from 1.5 sen a year ago, with payment scheduled for 20 December 2024.

Impact

• Maintain earnings forecasts.

Outlook

• Future earnings are expected to be supported by unbilled sales of RM179mn and an outstanding construction order book of RM1.1bn. Despite a robust order book, Ibraco's management remains proactive in pursuing additional building and infrastructure projects from both the public and private sectors.

Valuation

• No change to our SOP-derived TP of RM1.36/share. We remain optimistic about Ibraco’s strong foothold in Sarawak, which continues to drive solid property sales and secure construction projects with above-average profit margins. Maintain Buy.

Source: TA Research - 25 Nov 2024