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Wednesday, April 19, 2017

IBHD: Earning Maintained Due to Property Development


Result Update

For QE31/3/2017, IBhd's net profit rose 32% q-o-q or 21% y-o-y to RM18.6 million while revenue was unchanged q-o-q but rose 28% y-o-y to RM103 million. The better performance in both the revenue and profit was mainly due to higher revenue recognition of on-going projects for the Property Development segment as well as higher revenue and profit before tax for the Leisure segment. While revenue & PBT were relatively unchanged q-o-q, what was highlighted by management was the strong performance of the Property Development segment. To wit:

"[O]verall comparable result masks the continued growth of the Property Development segment where there was an increase in revenue and profit before tax for the quarter due to higher progress recognition of on-going projects. Lower revenue and profit before tax from the Leisure segment was expected for the current quarter as Leisure segment had attained its peak seasonal revenue in the preceding quarter due to the year-end school and festive holidays."


Table: IBhd's last 8 quarterly P&L


Chart 1: IBhd's last 15 quarterly P&L

Valuation

I-Bhd (closed at RM0.615 yesterday) is now trading at a trailing PER of 9.4x (based on last 4 quarters' EPS of 6.5 sen). At this PER, I-Bhd is deemed fairly valued.

Technical Outlook

IBhd is in a gradual uptrend line. Its immediate resistance will come from the horizontal line at RM0.66.


Chart 2: I-Bhd's weekly chart as at April 18, 2017 (Source: Chartnexus)

Conclusion

Based on good financial performance and fair valuation, I-Bhd could be a good stock to consider for long-term investment.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.
 

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