PublicInvest Research continues to like I-Berhad because of its long-term value proposition, which is supported by the fact that about 60 per cent of the gross development value (GDV) of RM10 billion for its i-City development in Selangor's capital city has yet to be realised.
"There are still significant unrealised gains from ongoing projects in the i-City development. The developer will continue to work on reducing its inventory levels, which currently stand at RM811.5 million, about RM500 million of which consists of its 8KiaPeng project in Kuala Lumpur's city centre," the firm said in a note yesterday.
According to PublicInvest Research, I-Berhad's prospects for 2022 look promising as the group attracts high-profile tenants at i-City.
It also stated that Malayan Banking Bhd (Maybank) would occupy 14 floors in the Grade A Green Building Index (GBI) smart office tower known as Menara Sumurwang @ i-City, increasing occupancy rates to 80 per cent.
Following the entry of Maybank, Malaysia's largest bank by assets, Menara Sumurwang, will be renamed Mercu Maybank. Maybank will occupy about 162,000 square feet of space as a permanent alternate office location at the tower.
By the first half of 2022, the office space will accommodate about 1,400 Maybank employees.
PublicInvest Research also noted that I-Berhad's BeCentral serviced apartment tower, which has yet to be officially launched, has sales recorded in its books.
The completion and gradual handover of the Hill10 Residences and the DoubleTree by Hilton, which is set to open its doors by the middle of next year, all point to a more meaningful financial year 2022 for the group, it said.
It anticipates that I-Berhad will remain profitable in the current fiscal year, which ends December 31, 2021, due to a more robust recovery in its leisure segment this year.
In the third quarter ended September 30, 2021, I-Berhad returned to profitability. It reported a net profit of RM3.2 million for the quarter under review, up from a loss of RM3.4 million in the previous quarter.
According to PublicInvest Research, the earnings increase was due to fair value gains.
It stated that I-Berhad's property development segment remained profitable as earnings from the construction progress of its Hill10 and BeCentral residential projects were recognised.
"We understand keys have already been handed over to Hill10 purchasers, which should see billings rise in the fourth quarter while potentially lowering unbilled sales, which are currently at RM32.9 million as of end-September," PublicInvest Research said.
The property investment segment of I-Berhad made an RM1 million pre-tax profit.
According to PublicInvest Research, there was a fair value gain from development cost savings for the smart office tower, which would have otherwise weighed on losses at the Central i-City mall due to the lockdown imposed during the quarter.
