A Weak Quarter. Results Note. Price: RM3.70 Target Price: RM3.70. By Sarah Lim l PP7004/02/2013(031762) Page 1 of 5

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1 IJM Land Berhad A Weak Quarter By Sarah Lim l sarahlim@kenanga.com.my Period 3Q15/9M15 OUTPERFORM Share Price Performance Price: RM3.70 Target Price: RM3.70 Actual vs. Expectations Dividends Key Results Highlights Outlook Change to Forecasts Rating Valuation Risks to Our Call 9M15 core net earnings* of RM224m came below expectations, as it accounted for 62% of street s FY15E and 66% of ours. The negative variance was largely due to weaker-than-expected billings. 9M15 sales of RM1.3b is deemed behind schedule as it made up 65% of our FY15E target of RM2.0b. None, as expected. QoQ, reported earnings was up by 34% due to remeasurement gains on investments of RM17.2m from Larut Leisure Enterprise (HK) Ltd. Excluding the oneoff item, core earnings was lower by 7% as the quarter saw more contributions from its 60% owned Rimbayu which resulted in higher MIs. YoY, 9M15 core earnings declined by 7% due to similar reasons mentioned above. Notably, net gearing has increased to 0.19x from 0.03x a year ago. The company acknowledged that the property market is challenging and rather take a conservative stance to ensure cashflow sustainability. These challenges are felt before GST implementation, implying that the current soft property market could worsen for the sector. Key launches on-going and new are Rimbayu Phase 5, Nasa City Phase 1, Pantai Sentral Phase 2 and Seremban. Investors can expect the privatisation process to come to an end by Apr-15. The privatisation has received shareholders approvals from both parties and is now pending high-court sanctions of the exercise. Trimming FY15-16E core earnings by 2%-3% as we lower our corresponding sales assumptions by 10%- 5% to RM1.8b-RM1.9b. Unbilled sales of RM1.8b provide close to one-year visibility. Maintain OUTPERFORM (from AO) Our previous TP reflects the Offer Price of RM3.55 (note that the Offer Price comprises 0.5 IJMCORP share plus 20 sen cash payment for every 1 IJMLAND share). Since both parties have received shareholders approvals, we switch our CALL from ACCEPT OFFER (AO) to OUTPERFORM and our TP is now based on arbitrage opportunities at last price as long as one: (i) is bullish on IJMCORP which is inline with our inhouse construction analyst (refer to IJMCORP RN) (ii) requires cheaper entry points. At this juncture, investors can exploit the arbitrage opportunity of 18 sen buy buying IJMLAND based on last price of RM3.70 vs. IJMCORP of RM7.18. Unable to meet its sales target. Sector risks, including further negative policies. KLCI 1, YTD KLCI chg 3.4% YTD stock price chg 10.4% Stock Information Bloomberg Ticker IJMLD MK Equity Market Cap (RM m) 5,767.6 Issued shares 1, week range (H) week range (L) mth avg daily vol: 1,261,331 Free Float 26% Beta 1.3 Major Shareholders IJM CORP BHD 64.2% GIC PRIVATE LIMITED 5.0% EMPLOYEES PROVIDENT 4.9% Summary Earnings Table FYE Mar (RM m) 2014A 2015E 2016E Turnover 2,046 1,892 2,023 EBIT PBT Net Profit (NP) Core NP Consensus (NP) n.a Earnings Revision n.a. -3% -4% Core EPS (sen) EPS growth (%) 71% -2% 5% NDPS (sen) BV/Share (RM) Core PER (x) Price/BV (x) Net Gearing (x) Dividend Yield (%) 1.6% 1.6% 1.6% *Note that core earnings excludes unrealized FOREX gains/losses and re-measurement gains on investments (e.g. RM17.2m gains from Larut Leisure Enterprise (HK) Ltd) which are non-cash items. PP7004/02/2013(031762) Page 1 of 5

2 OTHER POINTS Result Highlight FYE 31 Mar (RM'm) 3Q15 2Q15 QoQ% 3Q14 YoY% 9M15 9M14 YtdYoY Revenue % % 1, , % Op costs w/o % % -1, , % depn/amort Other Op Income % % % EBITDA % % % EBIT % % % Net finance (cost) / % % % income Share of % % % associates/jce One-offs/Exceptionals n.a. 0.0 n.a n.a. Pretax profit % % % Taxation % % % Minority Interests % % % Net profit % % % Core Net profit % % % EPS (sen) % 6.2-2% % Diluted EPS (sen) % 6.2-2% % NDPS (sen) NTA/share (RM) Net gearing/(cash) (x) EBITDA margin 26.7% 23.1% 25.9% 24.9% 26.9% Pretax margin 30.8% 22.9% 28.6% 26.2% 28.2% Source: Company, Kenanga Research Segmental Trends Source: Company, Kenanga Research This section is intentionally left blank. PP7004/02/2013(031762) Page 2 of 5

3 Income Statement Financial Data & Ratios FY Mar (RM m) 2012A 2013A 2014A 2015E 2016E FY Mar (RM m) 2012A 2013A 2014A 2015E 2016E Revenue Growth (%) EBITDA Revenue Depreciation EBITDA EBIT EBIT Net Interest Exp Pre-tax Income Investing Net Income Associate/JCE Core Net Income Exceptionals/FV PBT Profitability (%) Taxation EBITDA Margin Minority Interest EBIT Margin Net Profit PBT Margin Core Net Profit Net Margin Effective Tax Rate Balance Sheet ROE FY Mar (RM m) 2012A 2013A 2014A 2015E 2016E ROA Fixed Assets Intangibles Other FA DuPont Analysis Inventories Net margin (%) Receivables Assets Turnover (x) Other CA Leverage Factor (x) Cash ROE (%) Total Assets Leverage Payables Debt/Asset (x) ST Borrowings Debt/Equity (x) Other ST Liability Net Debt/(Cash) LT Borrowings Net Debt/Equity (x) Other LT Liability Minority Int Valuations Net Assets Core EPS (sen) NDPS (sen) Share Capital BV/share (RM) Reserves Core PER (x) Shareholders Equity Net Div. Yield (%) PBV (x) Cashflow Statement EV/EBITDA (x) FY Mar (RM m) 2012A 2013A 2014A 2015E 2016E Operating CF Investing CF` Financing CF Net Change in Cash Free Cash Flow Source: Kenanga Research Core earnings excludes one-offs including remeasurement gains, impairments/provisions/write-backs, translation FOREX, one-off disposals Fwd Core PER Band Fwd PBV Band Source: Bloomberg, Kenanga Research PP7004/02/2013(031762) Page 3 of 5

4 Peer Comparison NAME Price (27/2/15) Mkt Cap PER (x) Est. NDiv. Yld. Historical ROE P/BV Net Profit (RMm) FY13/14 NP Growth FY14/15 NP Growth (RM) (RMm) FY13/14 FY14/15 FY15/16 (%) (%) (x) FY13/14 FY14/15 FY15/16 (%) (%) (RM) Target Price Rating DEVELOPERS UNDER COVERAGE S P SETIA BHD* , % 6.8% % 11.8% 3.95 OUTPERFORM IOI PROPERTIES GROUP BHD* , % 4.3% % 13.7% 2.12 MARKET PERFORM UEM SUNRISE BHD* , % 7.8% % 12.6% 1.60 MARKET PERFORM SUNWAY BHD , % 13.2% % 1.6% 3.65 OUTPERFORM IJM LAND BHD* , % 17.7% % 4.6% 3.70 OUTPERFORM MAH SING GROUP BHD^ , % 16.1% % 8.2% 1.74 MARKET PERFORM UOA DEVELOPMENT BHD* , % 12.2% % 7.1% 2.00 MARKET PERFORM MALAYSIAN RESOURCES CORP BHD , % 2.6% % 16.1% 1.27 UNDERPERFORM KSL HOLDINGS BHD , % 15.3% % 12.2% 2.76 OUTPERFORM TROPICANA CORP BHD , % 11.9% % -30.6% 1.15 MARKET PERFORM MATRIX CONCEPTS HOLDINGS BHD , % 29.5% % 0.2% 3.05 OUTPERFORM CRESCENDO CORPORATION BHD* % 18.4% % 19.9% 2.46 MARKET PERFORM HUA YANG BHD % 22.8% % -0.1% 2.20 MARKET PERFORM CREST BUILDER HOLDINGS BHD % 8.9% % 12.0% 1.29 MARKET PERFORM CONSENSUS NUMBERS BERJAYA LAND BHD , n.a. n.a. n.a. 0.6% n.a. n.a. n.a. n.a SELL IGB CORPORATION BHD , % 5.0% % 13.9% 4.10 NEUTRAL YNH PROPERTY BHD % 5.7% % 27.0% 1.88 NEUTRAL YTL LAND & DEVELOPMENT BHD n.a n.a. 2.3% n.a n.a. n.a. n.a. BUY GLOMAC BHD % 8.9% % 18.4% 0.97 SELL PARAMOUNT CORP BHD % 7.9% % 6.3% 1.54 SELL IVORY PROPERTIES GROUP BHD n.a. n.a. n.a. 6.0% n.a. n.a. n.a. n.a. n.a. BUY TAMBUN INDAH LAND BHD % 28.9% % 8.2% 2.15 BUY * Core NP and Core PER ** Crescendo per share data is based on non-fully Diluted ^ Ex-rights and Ex-Bonus Source: Kenanga Research PP7004/02/2013(031762) Page 4 of 5

5 Stock Ratings are defined as follows: Stock Recommendations OUTPERFORM : A particular stock s Expected Total Return is MORE than 10% (an approximation to the 5-year annualised Total Return of FBMKLCI of 10.2%). MARKET PERFORM : A particular stock s Expected Total Return is WITHIN the range of 3% to 10%. UNDERPERFORM : A particular stock s Expected Total Return is LESS than 3% (an approximation to the 12-month Fixed Deposit Rate of 3.15% as a proxy to Risk-Free Rate). Sector Recommendations*** OVERWEIGHT : A particular sector s Expected Total Return is MORE than 10% (an approximation to the 5-year annualised Total Return of FBMKLCI of 10.2%). NEUTRAL : A particular sector s Expected Total Return is WITHIN the range of 3% to 10%. UNDERWEIGHT : A particular sector s Expected Total Return is LESS than 3% (an approximation to the 12-month Fixed Deposit Rate of 3.15% as a proxy to Risk-Free Rate). ***Sector recommendations are defined based on market capitalisation weighted average expected total return for stocks under our coverage. This document has been prepared for general circulation based on information obtained from sources believed to be reliable but we do not make any representations as to its accuracy or completeness. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may read this document. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees. Kenanga Investment Bank Berhad accepts no liability whatsoever for any direct or consequential loss arising from any use of this document or any solicitations of an offer to buy or sell any securities. Kenanga Investment Bank Berhad and its associates, their directors, and/or employees may have positions in, and may effect transactions in securities mentioned herein from time to time in the open market or otherwise, and may receive brokerage fees or act as principal or agent in dealings with respect to these companies. Published and printed by: KENANGA INVESTMENT BANK BERHAD (15678-H) 8th Floor, Kenanga International, Jalan Sultan Ismail, Kuala Lumpur, Malaysia Telephone: (603) Facsimile: (603) Website: Chan Ken Yew Head of Research PP7004/02/2013(031762) Page 5 of 5