- We reaffirm our BUY rating on IJM Land, with our fair value kept at RM3.80/share based on a 10% discount to our fully-diluted NAV estimate of RM4.20/share.
- IJM Land held a briefing for analysts and fund managers yesterday to provide some updates on its two key upcoming developments – Bandar Rimbayu and London – and also the latest update for its flagship project in Penang, The Light. Key takeaways from the briefing are as follows:-
- BANDAR RIMBAYU: First phase of Bandar Rimbayu – to be called the Chimes – would be launched in 4Q2012 and would see some 526 units on offer, to be developed on a 56.3acre piece of land.
- This would comprise:- (1) 301 units with land configuration of 22’x75’ or build-ups of between 2,200sf-2,300sf and 2,600sf-2,700sf for intermediate and corner units, respectively; (2) 225 units with land area of 4’x75’ or build-ups of between 2,300sf-2,400sf and 2,800sf-2,900sf for intermediate and corner units, respectively.
- To enhance the appeal of the township, we understand that IJM Land plans to have The Arc and the interchange from Saujana Putra to be ready upon the completion of Phase 1 units.
- LONDON: We understand IJM Land would be submitting its detailed plan for the London development very soon with expected launch within 12 to 15 months from the purchase. We note that the company is looking at spending close to GBP20mil (RM100mil) for the key foundation works of this project.
- Management guided for a healthy gross margin of more than 30% for this project and units would be priced at GBP900psf-GBP1,200psf with most of the units to have build-ups from 400sf-700sf and the bigger units at up to 1,000sf.
- In the same vein, management does not rule out further acquisitions in London should there be any other opportunities.
- THE LIGHT: IJM Land would be handing over the Light Linear units to purchasers soon. We understand some of the units have seen as much as 63% appreciation in the property price since its launch 3 years ago. Meanwhile, Light Point units would be handed over to buyers at end of Dec/early January. Current take-up rate is at 90% with bumi units currently being released. All in, out of the 1,079 units launched so far, Phase 1 has seen 820 units sold or at a take-up rate of 76%.
- The land reclamation for Phase 2 (GDV: RM4.5bil), which commenced last October, would be completed by year-end. We understand the group is already talking to several parties for enbloc sale of the boutique offices there and is looking at completing the deal by 2H2013.
Source: AmeSecurities
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