Reiterate hold with an unchanged target price of 94 sen: In February, Ibraco Bhd unveiled its first property development outside Sarawak, namely The Continew (GDV: RM415 million) in Kuala Lumpur. It is a mixed development featuring four units of three-storey commercial shop/retail outlets, 30 units of retail/office space and 510 serviced apartments. Priced at RM900 psf, we note it is attractive as compared to surrounding projects that are generally priced at RM1,000 psf onwards.
In terms of take-up rate, we gather that it is now 49% sold. In September, Ibraco proposed to buy four parcels of vacant leasehold land in Petaling Jaya, Selangor, for RM37.4 million (or RM220 psf) to further build up its presence in the Klang Valley. Measuring a total of 15,811.16 sq m, the land is strategically located along the New Pantai Expressway.
On the construction front, the group has secured a contract to build a new airport in Mukah, Sarawak, for RM302.6 million in July. Note that the airport job is only the second public construction contract Ibraco has won since the construction unit was set up in 2002.
Besides construction and property development, it has recently ventured into another new segment — education services. Last week, the group announced that it has teamed up with HELP Education Services Sdn Bhd to offer education at the primary, secondary and pre-university levels.
For a start, we understand that the group will allocate approximately RM55 million to RM60 million for this new business segment over a development period of two years. We believe that this would diversify the group’s source of income as well as enhance the value of its upcoming launches within its new township, Northbank, in Kuching. Ibraco is working with HELP to set up an education centre in the development.
https://www.edgeprop.my/content/1209257/ibraco-pins-its-future-strong-capital-position
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