IBhd: Earnings Maintained But Unbilled Sales Dropped Further

Result Update

For QE30/6/2017, IBhd's net profit rose 6% q-o-q or 34% y-o-y to RM19.6 million while revenue rose 24% q-o-q or 47% y-o-y to RM128 million. IBhd's revenue and profit before tax rose q-o-q due to "the continuous growth of the Property Development segment".


Table: IBhd's last 8 quarterly P&L


Graph 1: IBhd's last 20 quarterly P&L

The company was upbeat about its future prospects due to the success of the Hill10 Residence @ i-City (previously named Converse @ i-City), a 204 exclusive luxury residences located above the DoubleTree by Hilton @ i-City Shah Alam, which has attained a current take-up rate of 70% after its launch in April. Nevertheless we can see that unbilled sales has been on the decline since June 2016. In term of quarters of sales, unbilled sales peaked in September 2015 at 12 quarters of sales and it has since declined to less than 3 quarters of sales in June 2017.

 

Graph 2: IBhd's unbilled Sales for last 20 quarters
 
Valuation

I-Bhd (traded at RM0.615 this morning) has a trailing PER of 8.7x (based on last 4 quarters' EPS of 7.04 sen). At this PER, I-Bhd is deemed fairly valued.

Technical Outlook

IBhd's gradual uptrend seems to have ended with the decline last week. For now, IBhd is likely to move sideways between RM0.56 & RM0.60.


Chart 1: I-Bhd's weekly chart as at Jul 17, 2017 (Source: Shareinvestor.com)


Chart 2: I-Bhd's monthly chart as at Jul 17, 2017 (Source: Shareinvestor.com)

Conclusion

Based on good financial performance and fair valuation, I assign a rating of HOLD for IBhd. Its share price performance is likely to be unexciting for the next few quarters due to mildly negative technical outlook and weaker revenue.

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.