KUALA LUMPUR: PublicInvest says I-Berhad's focus on enhancing its investment and leisure/hospitality portfolios will positively impact its development pipeline.
"We see the merits of this shift considering that the recovery in the high-rise commercial and residential segment appears to be slower in finding its footing, though extraction of full value will still be contingent on the development portfolio," the firm said in a note.
PublicInvest maintains its 'Buy' rating on the stock, with an unchanged target price of 32 sen.
On Monday, I-Berhad reported that its net profit more than doubled in the third quarter compared to a year earlier, driven by higher contributions from its property development, property investment, and leisure and hospitality segments.
The group's chairman Tan Sri Lim Kim Hong noted that I-Berhad had reassessed its real estate investment strategy following the challenges posed by the pandemic, adding that the results achieved over the past nine months reflect their strategic efforts to reinvent themselves in the post-pandemic landscape.
For the three months ending Sept 30, 2024 (3QFY2024), net profit reached RM12.94 million, compared to RM5.51 million in the same period last year. Quarterly revenue increased by 38.06 per cent to RM61.91 million, the highest since 2QFY2018, up from RM44.84 million a year ago.
PublicInvest said that I-Berhad achieved its strongest core quarterly results in five years, noting that the net profit for the first nine months of 2024 (9MFY24) was RM22.5 million, up 180.5 per cent year-on-year and representing 114 per cent of full-year estimates.
"The notably better financial performance continues to be underpinned by the leisure and hospitality segments, which we had previously underestimated, but which is also the premise we are adjusting the FY24-FY26 profit expectations higher by about 60 per cent."
PublicInvest also pointed to several positive trends for the group, including strong sales figures for ongoing developments, higher occupancy rates for investment properties, and growing demand for its leisure offerings.
It noted that the corporate office tower is nearing full occupancy, data center renewal rates are strengthening, and the Central i-City mall has reached about 90 per cent occupancy, all of which are contributing significantly to the group's investment property performance.