News
Timely move for IOI Corp to relist property arm, says research analyst
13-May-2013
KUCHING: The possible move by IOI Corporation Bhd (IOI Corp) planning to relist its property arm in September this year with total asset size worth more than RM15 billion is seen by analysts as a timely move for the group.
Given the positive property development outlook in Malaysia and steady economic activities in Asia, analysts at the research side of Public Investment Bank Bhd (Public Research) believed it would be timely for IOI Corp to relist its property assets should this materialise.
“The property giant, which has exposure in Malaysia, Singapore and China, has the second largest operating profit in the financial year 2012 (FY12) amongst domestic property players,” it said, which was a strong indicator of the group’s outlook.
“We think the relisting of IOI Properties, being the second largest property player in Malaysia, will not come cheap based on its huge asset size.”
Assuming the listing valuation was based on the total net assets, Public Research estimated its market capitalisation would likely be at least RM12 billion, making the group the second largest property player on Bursa Malaysia by market capitalisation after UEM Land Bhd.
The research firm noted that existing shareholders of IOI Corp would also stand to benefit from this move.
“Upon listing, IOI Corp’s shareholders will be receiving at least half of the RM12 billion assets in the form of a dividend-in-specie. Based on IOI’s 6.3 billion shares, this would be translated into RM0.90 to RM1.10 per share,” it calculated.
“Apart from that, the demerger exercise will also include a renounceable rights issue, where existing shareholders subscribe to the rights exercise in order to not be diluted.”
The property group currently has an outstanding gross development value of RM28.2 billion in Malaysia and S$4.5 billion (RM11.2 billion) in Singapore.
The company currently has two projects in China, the first being a 7.7 acre piece of land in Xiamen which will be developed into a high-rise mixed development via a joint venture with a Taiwanese partner, expected to be completed in the next two years.
The second project, which is also in Xiamen would see the first phase development comprising four million square feet of shopping mall, hotel, offices and residential units.
The RM2 billion project will be IOI Corp’s first independent project in China and will also be expected to be done two years later.
“Pending review of our crude palm oil forecasts for FY13 and FY14, we retain our neutral rating on IOI Corp with an unchanged target price of RM4.90 per share.”
BorneoPost | May 10, 2013
13-May-2013
KUCHING: The possible move by IOI Corporation Bhd (IOI Corp) planning to relist its property arm in September this year with total asset size worth more than RM15 billion is seen by analysts as a timely move for the group.
Given the positive property development outlook in Malaysia and steady economic activities in Asia, analysts at the research side of Public Investment Bank Bhd (Public Research) believed it would be timely for IOI Corp to relist its property assets should this materialise.
“The property giant, which has exposure in Malaysia, Singapore and China, has the second largest operating profit in the financial year 2012 (FY12) amongst domestic property players,” it said, which was a strong indicator of the group’s outlook.
“We think the relisting of IOI Properties, being the second largest property player in Malaysia, will not come cheap based on its huge asset size.”
Assuming the listing valuation was based on the total net assets, Public Research estimated its market capitalisation would likely be at least RM12 billion, making the group the second largest property player on Bursa Malaysia by market capitalisation after UEM Land Bhd.
The research firm noted that existing shareholders of IOI Corp would also stand to benefit from this move.
“Upon listing, IOI Corp’s shareholders will be receiving at least half of the RM12 billion assets in the form of a dividend-in-specie. Based on IOI’s 6.3 billion shares, this would be translated into RM0.90 to RM1.10 per share,” it calculated.
“Apart from that, the demerger exercise will also include a renounceable rights issue, where existing shareholders subscribe to the rights exercise in order to not be diluted.”
The property group currently has an outstanding gross development value of RM28.2 billion in Malaysia and S$4.5 billion (RM11.2 billion) in Singapore.
The company currently has two projects in China, the first being a 7.7 acre piece of land in Xiamen which will be developed into a high-rise mixed development via a joint venture with a Taiwanese partner, expected to be completed in the next two years.
The second project, which is also in Xiamen would see the first phase development comprising four million square feet of shopping mall, hotel, offices and residential units.
The RM2 billion project will be IOI Corp’s first independent project in China and will also be expected to be done two years later.
“Pending review of our crude palm oil forecasts for FY13 and FY14, we retain our neutral rating on IOI Corp with an unchanged target price of RM4.90 per share.”
BorneoPost | May 10, 2013