PP 7767/09/2010(025354)

27 May 2010

Malaysia Corporate Highlights

RHB Research
Institute Sdn Bhd
A member of the
RHB Banking Group
Company No: 233327 -M

R e su lt s N o te
27 May 2010
MARKET DATELINE

IJM Land Share Price

Fair Value
:
:
RM2.06
RM3.06
FY03/10 Net Profit Almost Doubles From A Year Ago Recom : Outperform
(Maintained)

Table 1 : Investment Statistics (IJMLAND; Code: 5215) Bloomberg: IJMLD MK

Net Net
FYE Turnover profit EPS Growth PER C.EPS* P/CF P/NTA ROE Gearing GDY
Mar (RMm) (RMm) (sen) (%) (x) (sen) (x) (x) (%) (%) (%)
2009 671.0 51.1 5.9 4.0 34.8 - (31.1) 1.1 3.3 0.1 0.0
2010 1,101.1 98.3 8.9 50.4 23.1 - 11.1 1.4 6.6 0.3 1.0
2011F 1,418.0 201.5 18.3 104.9 11.3 15.0 2.0 1.2 10.9 0.5 1.0
2012F 1,654.2 301.0 27.3 49.4 7.6 21.0 1.9 1.1 14.2 0.6 1.0
Main Market Listing /Non-Trustee Stock * Consensus Based On IBES Estimates

RHBRI Vs. Consensus

♦ Within expectations. Excluding RM10.3m disposal gains, normalised Above
FY03/10 net profit of RM98.3m came in roughly in line with our forecast In Line
and the market consensus. Normalised FY03/10 net profit rose +92.4% Below

underpinned by RM1.25bn sales registered in FY03/10 that exceeded its Issued Capital (m shares) 1,103.27
internal target of RM1bn by a whopping 25%. IJM Land has proposed an Market Cap(RMm) 2,272.73
interim net dividend of 2 sen (ex-date n 28 Jul 2010) that is in line with Daily Trading Vol (m shs) 0.6
our expectation. 52wk Price Range (RM) 1.27-2.68
Major Shareholders: (%)
♦ So far so good in FY03/11. IJM Land targets RM1.4bn sales in FY03/11
IJM Corp 62.8
(+10-15% yoy). As at end-FY03/10, its unbilled sales stood at about
GIC 7.4
RM850m or 0.6x of our FY03/11 revenue forecast.
♦ Vietnam, here I come. IJM Land recently paid RM18m cash for a 70%
stake in Sova Holdings S/B that is embarking on a mixed development FYE Mar FY11 FY12 FY13
project on a 7-acre site in Phu Hoi commune, Nhon Trach City Centre, EPS chg (%) (0.7) (20.7) -
Dong Nai Province in Vietnam, with a state-owned company called Thai Var to Cons (%) 21.8 29.9 -
Duong Company-Sunco. The project will comprise four blocks of high-rise
PE Band Chart
residential apartments as well as retail and commercial components. Total
GDV is estimated at US$127.5m (after stripping out the JV partner’s share
PER = 20x
of GDV of 15% or US$22.5m as payment in kind for the land). Piling PER = 15x
PER = 10x
works for the initial phase are currently in progress and the maiden launch
is expected in June 2010. Assuming a 15% margin and development
period of five years, the project is expected to boost our FY11-12 earnings
forecasts by 1-2%.
♦ Risks and concerns. The risks include: 1) competition from peers; 2)
surge in raw material costs; 3) delays in launches and approvals; and 4)
Relative Performance To FBM KLCI
country risk.
♦ Forecasts. We are downgrading FY03/11-12 net profit forecasts by 0.7-
20.7%. The removal of contribution from the RM5bn mixed Canal City
IJM Land
project (due to the delay in land acquisition) more than offsets contribution
from the new project in Vietnam.
♦ Maintain Outperform. Correspondingly, indicative fair value based on FBM KLCI
RNAV is trimmed from RM3.19 to RM3.06. We continue to like IJM Land
for: (1) Its strong net profit CAGR of 66% between FY12/09-12; 2)
Potential earnings surprise from the disposal of the commercial properties
e.g. Jusco Regional mall in Melaka; and 3) It being a proxy to the upturn in
the local property market.
Joshua CY Ng
(603) 92802237
Please read important disclosures at the end of this report. joshuang@rhb.com.my

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Table 2. IJM Land Quarterly Results

QoQ YoY
FYE Mar (RMm) 4Q09 3Q10 4Q10 FY09 FY10 YoY (%) Comments
(%) (%)
Turnover 226.0 266.4 245.7 (7.8) 8.7 671.0 1,101.1 64.1 Qoq decline was mainly due to slower
progress billings during the quarter.
EBIT 20.0 50.1 49.7 (0.8) >+100 80.7 201.2 >+100 EBIT margin improved qoq from
18.8% in 3Q10 to 20.2% in 4Q10 due
to change in product mix.
Net interest (0.4) (15.4) (20.9) 35.6 >+100 (17.2) (52.0) >+100 Net gearing increased slightly from
0.25x in 3Q10 to 0.26x in 4Q10.
Associate company 6.9 (0.4) (2.1) >+100 >-100 4.8 (0.3) >-100
Pretax profit 26.5 34.2 26.7 (21.9) 0.9 68.3 148.9 >+100
Taxation (0.8) (10.4) (2.5) (76.5) >+100 (13.4) (33.9) >+100
Minority Interest 1.0 (1.0) (2.4) >+100 >-100 (3.8) (6.4) 68.8
Net profit 26.7 22.8 21.9 (4.2) (18.1) 51.1 108.7 >+100 Excluding one-off gain of RM10.3m
arising from the disposal of a
subsidiary in 2Q10, FY03/10
normalised net profit of RM98.3m
(>+92.4%) was in line with RHBRI
and consensus estimates.
EPS (sen) 2.4 1.9 1.8 (3.7) (24.0) 5.9 9.2 55.3
Gross DPS (sen) 0.0 0.0 2.0 Na Na 0.0 2.0 Na
NTA/share (RM) 1.4 1.4 1.5 1.4 1.5
EBIT margin (%) 8.8 18.8 20.2 12.0 18.3 Change in product mix.
Pretax margin (%) 11.7 12.8 10.9 10.2 13.5
Tax rate (%) (2.9) (30.4) (9.2) (19.6) (22.7)

Source: Company, RHBRI

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Table 3: RNAV
No Landbank Description Tenure Equity stake GDV (RMm) Landbank DCF (RMm)
(%) (acre)

1 Bukit Mandaa'rina, Cheras Mixed developement Leasehold 100 600 50 100.4

2 Laman Granview, Puchong Residential Leasehold 100 150 31 20.7
3 Serenia Gardens (Ukay Perdana) Residential Leasehold 50 500 64 40.0
4 Sh'ng Villa (Pandan Bistari) Residential Leasehold 50 390 42 32.3
5 Riana Green East, Phase 2 & 3, Residential Leasehold 50 329 8 28.9
Wangsamaju
6 Rimbunan Selayang Residential Leasehold 50 500 204 29.0
7 Jalan Raja Laut, KL Commercial Leasehold 100 750 3 154.6
8 S2, Seremban Mixed developement Freehold 100 726 434 80.2
9 S2 Heights Mixed developement Freehold 100 2,420 1,293 190.3
10 S2 CC/GC Mixed developement Freehold 100 91 63 9.7
11 Shah Alam 2 Mixed developement Leasehold 100 930 682 80.7
12 SS2, PJ Commercial Freehold 100 25 1 4.5
13 Melaka Commercial Leasehold 100 450 98 53.5
Sub-total 7,861 2,973 824.9
Northern Region
14 Permatang Tinggi Mixed developement Freehold 100 130 132 12.9
15 Jelutong Mixed developement Freehold 80 5,000 136 557.4
16 Jelutong Mixed developement Leasehold 80 1,300 52 135.4
17 Bukit Jambul Residential Leasehold 86 243 30 23.1
Sub-total 6,673 350 728.8
Southern Region
18 Suria Bistari / Suria Heights Residential Leasehold 51 300 9 12.7
19 Mount Austin Mixed developement Freehold 100 500 250 34.8
20 Sebana Cove Mixed developement Leasehold / 70 1,400 1188 91.0
Freehold
21 Nusa Duta Mixed developement Freehold 100 320 128 29.7
22 Permas Jaya Apartments Freehold 100 100 10 7.7
Sub-total 2,620 1585 176.0
Eastern Region
23 Bandar Utama, Sandakan Mixed developement Freehold 100 1,000 155 111.5
Sub-total 1,000 155 111.5
24 China Mixed developement - 50 500 0.0 21.1
25 Vietnam Mixed developement - 70 427 7.0 25.3
Sub-total 927 7.0 46.4
Unbilled sales 45.4
Total 19,081 5,070 1,933

Investment properties Book value Market Surplus

(RMm) value
(RMm)
1 Hotel Hotel and recretional club Leasehold 100 117.2 273.2 156.0
2 Menara IJM Land Office - 100 45 70 25.0
Sub-total 181.0
Grand total (landbank & investment 2,113.9
properties)
Shareholder fund as at Mar 10 1,655.4
Conversion of warrants 306.5
RNAV (RMm) 4,075.8
Share base (m) 1,330.3
RNAV / share (RM) 3.06

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 27 May 2010

Table 4. Earnings Forecasts

FYE Mar (RMm) FY09a FY10a FY11F FY12F Table 5: WACC assumption

Turnover 671.0 1,101.1 1,418.0 1,654.2 (%)

WACC 8.5
Gross Op Profit 82.5 143.7 294.6 441.8
Op Profit 80.7 201.2 278.2 421.3
Int exp (17.2) (52.0) (4.4) (8.2)
Associates 4.8 (0.3) 10.7 32.9
Exceptional item 0.0 10.3 0.0 0.0
Pretax Profit 68.3 148.9 284.5 445.9
Tax (13.4) (33.9) (71.1) (111.5)
Minorities (3.8) (6.4) (11.8) (33.4)
Net profit 51.1 108.7 201.5 301.0
Normalised net profit 51.1 98.3 201.5 301.0
Source: Company data, RHBRI estimates

IMPORTANT DISCLOSURES

This report has been prepared by RHB Research Institute Sdn Bhd (RHBRI) and is for private circulation only to clients of RHBRI and RHB Investment Bank Berhad
(previously known as RHB Sakura Merchant Bankers Berhad). It is for distribution only under such circumstances as may be permitted by applicable law. The
opinions and information contained herein are based on generally available data believed to be reliable and are subject to change without notice, and may differ or
be contrary to opinions expressed by other business units within the RHB Group as a result of using different assumptions and criteria. This report is not to be
construed as an offer, invitation or solicitation to buy or sell the securities covered herein. RHBRI does not warrant the accuracy of anything stated herein in any
manner whatsoever and no reliance upon such statement by anyone shall give rise to any claim whatsoever against RHBRI. RHBRI and/or its associated persons
may from time to time have an interest in the securities mentioned by this report.

This report does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives
of persons who receive it. The securities discussed in this report may not be suitable for all investors. RHBRI recommends that investors independently evaluate
particular investments and strategies, and encourages investors to seek the advice of a financial adviser. The appropriateness of a particular investment or
strategy will depend on an investor’s individual circumstances and objectives. Neither RHBRI, RHB Group nor any of its affiliates, employees or agents accepts
any liability for any loss or damage arising out of the use of all or any part of this report.

RHBRI and the Connected Persons (the “RHB Group”) are engaged in securities trading, securities brokerage, banking and financing activities as well as providing
investment banking and financial advisory services. In the ordinary course of its trading, brokerage, banking and financing activities, any member of the RHB
Group may at any time hold positions, and may trade or otherwise effect transactions, for its own account or the accounts of customers, in debt or equity
securities or loans of any company that may be involved in this transaction.

“Connected Persons” means any holding company of RHBRI, the subsidiaries and subsidiary undertaking of such a holding company and the respective directors,
officers, employees and agents of each of them. Investors should assume that the “Connected Persons” are seeking or will seek investment banking or other
services from the companies in which the securities have been discussed/covered by RHBRI in this report or in RHBRI’s previous reports.

This report has been prepared by the research personnel of RHBRI. Facts and views presented in this report have not been reviewed by, and may not reflect
information known to, professionals in other business areas of the “Connected Persons,” including investment banking personnel.

The research analysts, economists or research associates principally responsible for the preparation of this research report have received compensation based
upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues.

The recommendation framework for stocks and sectors are as follows : -

Stock Ratings

Outperform = The stock return is expected to exceed the FBM KLCI benchmark by greater than five percentage points over the next 6-12 months.

Trading Buy = Short-term positive development on the stock that could lead to a re-rating in the share price and translate into an absolute return of 15% or more
over a period of three months, but fundamentals are not strong enough to warrant an Outperform call. It is generally for investors who are willing to take on
higher risks.

Market Perform = The stock return is expected to be in line with the FBM KLCI benchmark (+/- five percentage points) over the next 6-12 months.

Underperform = The stock return is expected to underperform the FBM KLCI benchmark by more than five percentage points over the next 6-12 months.

Industry/Sector Ratings

Overweight = Industry expected to outperform the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

Neutral = Industry expected to perform in line with the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

Underweight = Industry expected to underperform the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

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.

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