AmResearch reaffirmed its BUY rating on Ivory PROPERTIES [] Bhd (Ivory) with unchanged fair value of RM1.75/share based on 35% discount to its NAV/share of RM2.70/share.
The research house said on Friday, Aug 6 that Ivory is buying prime seafront land (1.1 acres) at the Batu Ferringhi seafront area on Penang island for RM25 million - conditional on Ivory securing planning approval from the local council.
Project comprises 96 units of luxury condominiums with built up areas from 2,400sf to 8,000sf, housed in a 41-storey tower.
“With gross development value of RM159mil, market response is expected to be strong due to the project’s scarcity premium and unique appeal,” it said.
AmResearch said potential enhancement to its earnings estimates and NAV is significant. Ivory will be stepping up presales from RM500mil in FY10F to RM750mil in FY11F.
“Current unbilled sales are RM385mil - and rising. Despite its share price outperformance, the stock is still at the early stages of a sustained re-rating cycle. At RM1.28/share currently, Ivory is trading at a steep 53% discount to our NAV of RM2.70/share.
“Forward PE multiples – 3x-4x, are attractive with EPS CAGR of 63%. Taken together, Ivory remains an excellent transformational growth story,” it said.
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