Professional Documents
Culture Documents
Malaysia
RHB Research
Institute Sdn Bhd
X Ivory’s primary business is property development. All of its completed LISTING DETAILS
projects with a total GDV of RM675m have been in Penang (see Table 2), Listing Bursa Malaysia Main
and we understand that it is planning to further expand its focus in the Market
state as well as in a new market i.e. Tanjung Malim, Perak with a Listing Date 28 July 2010
combined GDV of RM2.7bn (see Tables 3 and 4) while also keeping a Sector Property
lookout for landbanks in the Klang Valley area. Tax Resident Malaysia
Public Issue 1) 9.3m shares to the
X Ivory has built a reputation as a premier residential developer in Penang
Of Malaysian public
with projects such as its Moonlight Bay (94% completed, GDV : RM200m)
2) 1.0m shares to
which comprises 70 units of 4-storey luxury villas and 20 units of condo- employees and
villas. More than 90% of the villas have been sold at an average price of business associates
RM2m/unit. 3) 34.0m shares to
X One of Ivory’s strengths is its ability to handle challenging approval selected investors
via private
processes for unique and extraordinary development designs, and also
placement
shorten the approval process. The ability is due to Ivory having a 4) 0.6m to Bumiputera
dedicated and specialised authorities liaison team to solve and monitor all investors approved
authorities liaison matters. It normally takes Ivory 6 months as compared by MITI via private
with 12 months or more for other developers, taking into account the level placement
Offer For Sale 1) 16.2m Bumiputera
of complexity of the project. We understand that the state of Penang is
Of investors approved
one of the states in Malaysia with the toughest and most stringent by MITI
guidelines for development application and approval.
MAJOR SUBSIDIARIES
X In 2H2010, we believe news flow will take precedence over fundamentals
Ivory Associates 100%
in driving the share price performance of property developers. Positive
Ivory Gleneary 100%
news flow is likely to come from: (1) The formal awards of Federal land
Ivory Square 100%
parcels (see Table 5) to “master developers” and the subsequent farming
out of the sub-divided smaller land parcels to various developers; and (2) MANAGEMENT FORECAST
The increased interest and hence prices in land and properties including FY12/10
residential, commercial and industrial in Iskandar Malaysia on expectation Net Earnings (RMm) 33.9
of rising investment and hence economic activities in the growth corridor, Net EPS (sen) 18.2
on the back of the improving ties between Malaysia and Singapore. Net DPS (sen) na
X On the flip side of the coin, share prices of developers may take a beating
if the International Financial Reporting Interpretations Committee 15
(IFRIC 15) is to be adopted. Basically, IFRIC only allows property
development income to be recognised on a “completion” basis, vis-à-vis
“progress” previously. This will result in high earnings volatility due to
lumpy profit recognition. Naturally, developers with a large portfolio of
projects (including township development) and investment properties
(such as SP Setia, IJM Land, Mah Sing and SunCity) will be less affected, Joshua Ng
while project-driven developers especially those in the high-rise and (603) 92802641
joshuang@rhb.com.my
commercial segments (such as Ivory, Glomac, YNHP, Sunrise and Hunza)
will take the full blunt.
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27 July 2010
IVORY 2 PROPERTIES
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Future projects
Penang Times Square Phase 3 469.6 469.6 64.2
Penang Times Square Phase 4 155.0 155.0 19.3
Aston Villa Phase 2 1.4 1.4 0.2
Aston Villa Phase 3 33.6 33.6 4.4
Ivory Eco Park 420.0 420.0 45.4
Mount Erskine 204.1 204.1 29.3
City Mall 161.8 161.8 23.1
Island Resort Phase 2 89.0 89.0 10.5
Total 2163.3 2163.3 219.8
X At the helm of the company is CEO and managing director Dato’ Low Eng Hock who has had
approximately 25 years of experience in property development and building and construction. He has
a Bachelor’s Degree in Engineering with Distinction from Concordia University, Canada.
X At the offer price of RM1.00, the IPO will raise RM44.9m gross proceeds (see Table 7 for IPO
proceeds utilisation). Post-IPO, the company is estimated to be in a net gearing of 42%.
X We project Ivory’s net profits to grow at 54.4% and 21.5% in FY10-11 driven largely by: 1) Penang
Times Square; 2) Mount Erskine; and 3) Island Resort. Indicative fair value is RM1.18 based on
RNAV (see Table 6).
IVORY 3 PROPERTIES
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27 July 2010
Table 8 :
FYE Dec (RMm) 2009 2010f 2011f 2012f
IVORY 4 PROPERTIES
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27 July 2010
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IVORY 5 PROPERTIES
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MALAYSIA
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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.