IOICORP (1961) : RHB Research downgrades IOI Properties to Neutral, cuts target price to RM2.63
KUALA LUMPUR (Dec 8): RHB Research has downgraded IOI Properties Group Bhd (IOIPG) to “Neutral” (from “Buy”) at RM2.39 with a lower target price if RM2.63 (from RM3.10) as the research house said it was turning bearish on Malaysia’s property sector going into 2015.
In a note Monday, the research house said it was also neutral on IOIPG’s 37% stake acquisition in Taipei 101.
While this could lift IOIPG’s earnings slightly and give it the prestige of owning a meaningful stake in a landmark premium building, we think the market will need more time to digest the transaction, given its size.
“Given the size of this acquisition (1/3 of market cap) coupled with the expected dilution impact from the rights issue, we believe the market will likely take extra time to digest this bold move.
“Meanwhile, we are turning bearish on the property sector next year as negative sentiment kicks in after the recent fall in equity and commodity prices, and hence the potential downside in GDP growth,” it said.
“We lower our target price to RM2.63 (from RM3.10), based on a larger discount to RNAV of 40% (from 30%),” it said.
At 10.49am, IOIPG fell 0.84% or two sen to RM2.37 with 489,800 shares done.
http://www.theedgemarkets.com
KUALA LUMPUR (Dec 8): RHB Research has downgraded IOI Properties Group Bhd (IOIPG) to “Neutral” (from “Buy”) at RM2.39 with a lower target price if RM2.63 (from RM3.10) as the research house said it was turning bearish on Malaysia’s property sector going into 2015.
In a note Monday, the research house said it was also neutral on IOIPG’s 37% stake acquisition in Taipei 101.
While this could lift IOIPG’s earnings slightly and give it the prestige of owning a meaningful stake in a landmark premium building, we think the market will need more time to digest the transaction, given its size.
“Given the size of this acquisition (1/3 of market cap) coupled with the expected dilution impact from the rights issue, we believe the market will likely take extra time to digest this bold move.
“Meanwhile, we are turning bearish on the property sector next year as negative sentiment kicks in after the recent fall in equity and commodity prices, and hence the potential downside in GDP growth,” it said.
“We lower our target price to RM2.63 (from RM3.10), based on a larger discount to RNAV of 40% (from 30%),” it said.
At 10.49am, IOIPG fell 0.84% or two sen to RM2.37 with 489,800 shares done.
http://www.theedgemarkets.com
