The Seremban 2 development by IJM Land.
KUALA LUMPUR: Affin Investment Research is maintaining its Buy recommendation on IJM Land with an unchanged target price of RM3.20, base don a 15% discounte to its RNAV estimate of RM3.77 per share.
It said on Friday it continues to like IJM Land for its strong management, good branding and strategic land bank.
“Relative to other listed peers, we believe IJM Land’s property sales will be more resilient to the near term property market slowdown given their focus on townships/mass market housing developments and good geographical diversification,” said the research house.
Affin Research said IJM Land had bought a 60% equity interest in Asas Panorama Sdn Bhd on Thursday. Asas Panorama had on the same day signed 67 conditional sale and purchase agreements to buy 67 parcels of leasehold land in Mukim Sungai Karang, Kuantan.
The 67 parcels of land, covering 675.1 acres, was purchased at RM293.1mil (RM438,612 per acre or RM10 psf). The remaining 40% equity interest in Asas Panorama is held by Sino Development Ventures Ltd.
Sino Development Ventures will be acquired by Guangxi Beibu Gulf International Port Group Co. Ltd, which is IJM Corporation’s partner in the Kuantan Port expansion project.
Affin Research said Asas Panorama intends to develop the land into a mixed development projectwith a primary focus on industrial development. Based on preliminary assessment, IJM Land estimate the development will have a potential GDV of RM1.4bil, starting 2014 with a development period of 10 years.
The group has however yet to submit the development plan to the authorities.
“We are generally positive on this new business venture. The land is located near Kuantan Port and the recently launched Malaysia-China Kuantan Industrial Park (MCKIP). The JVCo will develop the land as part of Kuantan Port’s hinterland and it is intended to be an extension of the current Gebeng Prime Industrial Estate.
“The land acquisition price of RM10 psf is close to the market value as appraised by Knight Frank Malaysia; and the acquisition enables IJM Land to further diversify its geographical reach into Kuantan and add anindustrial development project into its property development portfolio, of which currently is centred on residential and commercial developments,” it said.