KUALA LUMPUR (June 4): Shares of I-Bhd (KL:IBHD) rose to their highest in more than four months after Public Investment Bank upgraded its rating for the property developer, citing increased confidence in the consistency of earnings recovery.
I-Bhd climbed as much as 6% or 1.5 sen to 26.5 sen, its highest since Jan 30, 2024. At Tuesday's market close, the counter remained at 26.5 sen, valuing the company at RM492.18 million on Bursa Malaysia. More than 1.8 million shares changed hands, five times the trading volume’s 200-day moving average.
Following a six-fold year-on-year jump in net profit for the first quarter (1Q), I-Bhd is expected to record even stronger quarters ahead for the rest of the year on sustained traction from its growth initiatives, Public Investment Bank said and lifted its call to "trading buy" from "neutral" previously.
"We continue to be encouraged by the group’s steady fundamental improvements,” Public Investment Bank said, flagging that longer-term prospects remain attractive as the company still has development worth RM5 billion to be realised.
Public Investment Bank is the sole research house covering the stock, and its "trading buy" call means the stock return is expected to exceed a relevant benchmark’s return by 5% or higher over the next three months though the fundamentals are not strong enough to warrant an "outperform" recommendation.
Shares of I-Bhd have climbed 15% so far this year amid broad rally in property stocks on the back of resilient demand and government measures to support home ownership.
Still, Public Investment Bank believes there is more upside to the stock and raised its target price to 32 sen from 26 sen previously. The research house also raised the possibility for the company to tap into data centres.
"Against the backdrop of recent hype on data centers and the property sector, it should be noted that the group has a seven-acre plot of land identified for the construction of such, though not a priority at this juncture," it added.
Last Friday (May 31), I-Bhd reported a six-fold increase in its net profit for the first quarter ended March 31, 2024 (1QFY2024) to RM4.07 million from RM675,000 a year earlier as lower expenses offset decline in revenue.
Revenue for the quarter slipped 8.6% year-on-year to RM40.63 million from RM44.46 million due to clearance of existing inventory at its property development segment, I-Bhd said in an earlier exchange filing.
As at end-March 2024, the property development segment’s unbilled sales stood at RM97.2 million.