PP 7767/09/2010(025354)

1 March 2010
RHB Research
Malaysia Corporate Highlights Institute Sdn Bhd
A member of the
RHB Banking Group
Company No: 233327 -M

R e su lt s N o te
1 March 2010
MARKET DATELINE

IJM Land Share Price

Fair Value
:
:
RM2.08
RM3.19
On Track Recom : Outperform
(Maintained)

Table 1 : Investment Statistics (IJMLAND; Code: 5215) Bloomberg: IJMLD MK

Net Net
FYE Turnover profit EPS Growth PER C.EPS* P/CF P/NTA ROE Gearing GDY
Mar (RMm) (RMm) (sen) (%) (x) (sen) (x) (x) (%) (%) (%)
2009 671.0 51.1 5.9 4.0 35.1 - (31.4) 1.2 3.3 0.1 0.0
2010F 907.5 107.6 9.8 64.6 21.3 9.0 2.5 1.4 6.6 0.3 1.0
2011F 1,405.2 202.8 18.4 88.5 11.3 15.0 4.2 1.3 11.1 0.3 1.0
2012F 1,903.0 379.7 34.4 87.2 6.0 22.0 2.7 1.0 17.4 0.4 1.0
Main Market Listing /Non-Trustee Stock * Consensus Based On IBES Estimates

RHBRI Vs. Consensus

♦ Within expectations. Excluding RM10.3m net gain arising from the Above
disposal of a subsidiary (a SPV which holds PJ8 Block C) in 2Q10, IJM Land In Line
reported 9MFY03/10 normalised net profit of RM76.5m (>+100% yoy). Below
This was within expectations, accounted for 71% and 74% of our and
Issued Capital (m shares) 1,103.27
consensus estimates, respectively. As at Dec 09, the company has unbilled
Market Cap(RMm) 2,294.80
sales of about RM800m, which represents 0.9x of our FY10 revenue Daily Trading Vol (m shs)
forecast. We understand that the company has achieved close to RM1bn 52wk Price Range (RM)
sales as at Dec 09. Major Shareholders: (%)
IJM Corp 62.8
♦ Aggressive launching plans. In view of improving property demand and
GIC 7.4
economic outlook, IJM Land plans to launch the RM165m Light Collection I
in 2Q10 on a 7 acres site next to the Penang Bridge. The project will
comprise 152 condominiums and 24 water villas with estimated selling
FYE Mar FY10 FY11 FY12
price of RM650 psf and RM800 psf, respectively. The built-up areas for the
EPS chg (%) - - -
condominiums range from 1,375 to 1,580 sq.ft. while the water villas have Var to Cons (%) 8.4 22.6 56.4
a built-up area of 3,169 sq.ft. As for the Light Collection II (with an
estimated RM257m GDV), it is scheduled to be launched by 2H10. It will PE Band Chart
comprise 297 condominiums with built-up areas ranging from 516 to 3,528
sq ft with selling price from RM700 psf onwards. Meanwhile, the company
PER = 30x
also plans to launch its RM123m Maritime Square (mixed development PER = 20x
PER = 10x
comprising serviced suites, shop and office units) in May 10. We have
incorporated these projects into our earnings forecasts.

♦ Maintain bullish on the property sector. Aggressive property launches

by developers are not a surprise to us given the economic recovery and
improving property demand. Rising inflationary expectation and an excess Relative Performance To FBM KLCI
of liquidity permeating the market due to easy and cheap monetary
conditions will enhance house buyers’ affordability. This will be further
supported by attractive marketing packages offered by developers. IJM Land

♦ Risks and concerns. The risks include: 1) competition from peers; 2)

surge in raw material costs; 3) delays in launches and approvals; and 4) FBM KLCI
country risk.
♦ Earnings outlook. No change to our FY10-12 earnings forecasts.

♦ Valuation. Our indicative fair value is maintained at RM3.19 based on

RNAV valuation method. We are maintaining our Outperform
recommendation on the stock. Low Yee Huap, CFA
(603) 92802237
Please read important disclosures at the end of this report. low.yee.huap@rhb.com.my

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Table 2. IJM Land Quarterly Results

QoQ YoY
FYE Mar (RMm) 3Q09 2Q10 3Q10 9M09 9M10 YoY (%) Comments
(%) (%)
Turnover 210.1 304.2 266.4 (12.4) 26.8 445.0 855.4 92.2 Qoq decline was mainly due to lower
contribution from its shopping
complex in SS2, Petaling Jaya which is
close to completion. As at Dec 09, it
has unbilled sales of about RM800m,
or 0.9x of our FY10 revenue forecast.
The company has achieved sales of
close to RM1bn as at Dec 09.
EBIT 29.9 55.2 50.1 (9.2) 67.8 60.7 151.5 >+100 EBIT margin improved qoq from
18.1% to 18.8% due to change in
product mix.
Net interest (11.1) (9.4) (15.4) 65.0 39.7 (16.8) (31.0) 85.0 Net gearing improved from 0.29x in
2Q10 to 0.25x in 3Q10.
Associate company (1.8) 1.7 (0.4) >-100 (75.4) (2.1) 1.8 >-100
Pretax profit 17.0 47.5 34.2 (27.9) >+100 41.8 122.2 >+100
Taxation (5.5) (9.9) (10.4) 5.2 89.7 (12.6) (31.4) >+100
Minority Interest (0.3) (0.3) (1.0) >+100 >+100 (4.8) (4.0) (16.1)
Net profit 11.2 37.3 22.8 (38.8) >+100 24.4 86.8 >+100 Excluding one-off gain of RM10.3m
arising from the disposal of a
subsidiary in 2Q10, normalised net
profit of RM76.5m (>+100%) was in
line with RHBRI and consensus
estimates.
EPS (sen) 1.0 2.5 1.9 (24.8) 87.3 3.1 6.3 >+100
Gross DPS (sen) 0.0 0.0 0.0 Na Na 0.0 0.0 Na
NTA/share (RM) 1.3 1.4 1.4 1.3 1.4
EBIT margin (%) 14.2 18.1 18.8 13.6 17.7 Change in product mix.
Pretax margin (%) 8.1 15.6 12.8 9.4 14.3
Tax rate (%) (32.3) (20.9) (30.4) (30.2) (25.7)

Source: Company, RHBRI

Table 3: RNAV
No Landbank Description Tenure Equity stake GDV (RMm) Landbank DCF (RMm)
(%) (acre)
1 Canal City Mixed developement Leasehold 50 5,000 2,383 180.4
2 Bukit Mandaa'rina, Cheras Mixed developement Leasehold 100 600 50 104.4
3 Laman Granview, Puchong Residential Leasehold 100 150 31 21.2
4 Serenia Gardens (Ukay Perdana) Residential Leasehold 50 500 64 40.9
5 Sh'ng Villa (Pandan Bistari) Residential Leasehold 50 390 42 33.1
6 Riana Green East, Phase 2 & 3, Residential Leasehold 50 329 8 28.9
Wangsamaju
7 Rimbunan Selayang Residential Leasehold 50 500 204 29.5
8 Jalan Raja Laut, KL Commercial Leasehold 100 750 3 160.5
9 S2, Seremban Mixed developement Freehold 100 726 434 82.2
10 S2 Heights Mixed developement Freehold 100 2,420 1,293 192.4
11 S2 CC/GC Mixed developement Freehold 100 91 63 9.9
12 Shah Alam 2 Mixed developement Leasehold 100 930 682 81.8
13 SS2, PJ Commercial Freehold 100 25 1 5.0
14 Melaka Commercial Leasehold 100 450 98 58.0
Sub-total 12,861 5,356 1,028.2
Northern Region
15 Permatang Tinggi Mixed developement Freehold 100 130 132 13.2
16 Jelutong Mixed developement Freehold 80 5,000 136 565.5
17 Jelutong Mixed developement Leasehold 80 1,300 52 137.1
18 Bukit Jambul Residential Leasehold 86 243 30 23.7
Sub-total 6,673 350 739.4
Southern Region
19 Suria Bistari / Suria Heights Residential Leasehold 51 300 9 13.0
20 Mount Austin Mixed developement Freehold 100 500 250 35.3
21 Sebana Cove Mixed developement Leasehold / 70 1,400 1188 92.4
Freehold

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22 Nusa Duta Mixed developement Freehold 100 320 128 30.2

23 Permas Jaya Apartments Freehold 100 100 10 7.9
Sub-total 2,620 1585 178.7
Eastern Region
24 Bandar Utama, Sandakan Mixed developement Freehold 100 1,000 155 116.0
Sub-total 1,000 155 116.0
25 China Mixed developement - 50 500 - 21.1
Sub-total 500 - 21.1
26 Unbilled sales 118.7
Total 23,154 7,446 2,202.2

Investment properties Book value Market Surplus

(RMm) value
(RMm)
1 Hotel Hotel and recretional club Leasehold 100 117.2 273.2 156.0
2 Menara IJM Land Office - 100 45 70 25.0
Sub-total 181.0
Grand total (landbank & investment 2,383.2
properties)
Shareholder fund as at Mar 09 1,547.6
Conversion of warrants 306.5
RNAV (RMm) 4,237.2
Share base (m) 1,330.3
RNAV / share (RM) 3.19

Table 4. Earnings Forecasts

FYE Mar (RMm) FY09a FY10F FY11F FY12F Table 5: WACC assumption

Turnover 671.0 907.5 1,405.2 1,903.0 (%)

WACC 8.5
Gross Op Profit 82.5 143.7 292.7 534.2
Op Profit 80.7 131.1 276.8 514.0
Int exp (17.2) (0.8) (1.8) (0.5)
Associates 4.8 2.1 10.7 35.0
Exceptional item 0.0 0.0 0.0 0.0
Pretax Profit 68.3 147.3 285.7 548.5
Tax (13.4) (36.8) (71.4) (137.1)
Minorities (3.8) (2.9) (11.4) (31.7)
Normalised net profit 51.1 107.6 202.8 379.7

Source: Company data, RHBRI estimates

IMPORTANT DISCLOSURES

This report has been prepared by RHB Research Institute Sdn Bhd (RHBRI) and is for private circulation only to clients of RHBRI and RHB Investment Bank Berhad
(previously known as RHB Sakura Merchant Bankers Berhad). It is for distribution only under such circumstances as may be permitted by applicable law. The
opinions and information contained herein are based on generally available data believed to be reliable and are subject to change without notice, and may differ or
be contrary to opinions expressed by other business units within the RHB Group as a result of using different assumptions and criteria. This report is not to be
construed as an offer, invitation or solicitation to buy or sell the securities covered herein. RHBRI does not warrant the accuracy of anything stated herein in any
manner whatsoever and no reliance upon such statement by anyone shall give rise to any claim whatsoever against RHBRI. RHBRI and/or its associated persons
may from time to time have an interest in the securities mentioned by this report.

This report does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives
of persons who receive it. The securities discussed in this report may not be suitable for all investors. RHBRI recommends that investors independently evaluate
particular investments and strategies, and encourages investors to seek the advice of a financial adviser. The appropriateness of a particular investment or
strategy will depend on an investor’s individual circumstances and objectives. Neither RHBRI, RHB Group nor any of its affiliates, employees or agents accepts
any liability for any loss or damage arising out of the use of all or any part of this report.

RHBRI and the Connected Persons (the “RHB Group”) are engaged in securities trading, securities brokerage, banking and financing activities as well as providing
investment banking and financial advisory services. In the ordinary course of its trading, brokerage, banking and financing activities, any member of the RHB
Group may at any time hold positions, and may trade or otherwise effect transactions, for its own account or the accounts of customers, in debt or equity
securities or loans of any company that may be involved in this transaction.

“Connected Persons” means any holding company of RHBRI, the subsidiaries and subsidiary undertaking of such a holding company and the respective directors,
officers, employees and agents of each of them. Investors should assume that the “Connected Persons” are seeking or will seek investment banking or other
services from the companies in which the securities have been discussed/covered by RHBRI in this report or in RHBRI’s previous reports.

This report has been prepared by the research personnel of RHBRI. Facts and views presented in this report have not been reviewed by, and may not reflect
information known to, professionals in other business areas of the “Connected Persons,” including investment banking personnel.

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The research analysts, economists or research associates principally responsible for the preparation of this research report have received compensation based
upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues.

The recommendation framework for stocks and sectors are as follows : -

Stock Ratings

Outperform = The stock return is expected to exceed the FBM KLCI benchmark by greater than five percentage points over the next 6-12 months.

Trading Buy = Short-term positive development on the stock that could lead to a re-rating in the share price and translate into an absolute return of 15% or more
over a period of three months, but fundamentals are not strong enough to warrant an Outperform call. It is generally for investors who are willing to take on
higher risks.

Market Perform = The stock return is expected to be in line with the FBM KLCI benchmark (+/- five percentage points) over the next 6-12 months.

Underperform = The stock return is expected to underperform the FBM KLCI benchmark by more than five percentage points over the next 6-12 months.

Industry/Sector Ratings

Overweight = Industry expected to outperform the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

Neutral = Industry expected to perform in line with the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

Underweight = Industry expected to underperform the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

RHBRI is a participant of the CMDF-Bursa Research Scheme and will receive compensation for the participation. Additional information on recommended
securities, subject to the duties of confidentiality, will be made available upon request.

This report may not be reproduced or redistributed, in whole or in part, without the written permission of RHBRI and RHBRI accepts no liability whatsoever for the
actions of third parties in this respect.

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