IOI Corporation Berhad : Solid debut by IOI Properties, RM10bil market cap makes it one of the largest property counters

Big day: Shin Cheng striking the gong to mark IOI Properties' listing on Bursa Malaysia. With him are Yeow Seng (second from right) and the company's directors and senior management officials . -Bernama

KUALA LUMPUR: IOI Properties Group Bhd, Bursa Malaysia's stock debutant for the year, made a strong maiden appearance with a hefty 70-sen premium over its reference price of RM2.51, making it one of the largest property companies on the local bourse with a market capitalisation of over RM10bil.

At the opening bell, IOI Properties surged to RM3.21, hitting a high of RM3.56 within minutes of trading. The stock closed up 64 sen, or 25.49%, at RM3.15.

IOI Group founder Tan Sri Lee Shin Cheng said that market capitalisation was not that crucial and that he would be focusing on the company's sustainability and growth.

"Having the biggest market capitalisation is not important, the company's growth and sustainability is more important," he said after the listing of IOI Properties.

Shin Cheng said the company was looking at more long-term property investments and was also eyeing the overseas market to transform itself into a multinational property entity.

He added that the company's mega projects included IOI Resort City in Putrajaya, South Beach Development in Singapore and IOI Palm City in Xiamen, China.

The projects are expected to have a gross development value of RM10.7bil upon completion.

"What matters most for us is sustainable growth," IOI Properties chief executive officer Lee Yeow Seng said.

Yeow Seng said the company was expecting annual sales of up to RM3bil for the next three financial years ending June 30, 2016, with property launches in Malaysia, Singapore and China.

He said it would be a challenging year in 2014 due to the Government's several cooling measures.

"Nevertheless, we are very positive due to our diversity in geographical locations and the different market segments we serve in Malaysia, Singapore and China," he said, adding that the company was always on the lookout for new investment opportunities.

On its dividend policy, Yeow Seng said the company would pay more dividends if it made more profits.

RHB Research has a "buy" call on the stock, with a fair value of RM3.50. It said IOI Properties' massive township developments - a segment less vulnerable to sectoral cooling measures - would provide the company with sustainable sales.

"IOI's backing has benefited IOI Properties, with an easier source of land bank and high margins for property developments. Future value would be unlocked via a pool of investment assets worth more than RM2bil," it said.

The research outfit pointed out that given IOI Properties' RM8.1bil market capitalisation at listing, the company was qualified to be on investors' radar screens.