[%yFBf%] 
Research by HLIB
BUY – TPRM3.90

" Interest cost savings from Fed rate cuts ”

The recent 50 bps rate cut by the FOMC augurs well for IOIPG, given that it has 82% of its debt denominated in SGD, mostly at floating rates. Note that Singapore interest rates tend to move in tandem with US interest rates. A 50 bps reduction in interest rate could translate to an annual interest saving of SGD22.5m (RM74.4m). Further savings are expected when more rate cuts materialize. While we anticipate further debt drawdown for Marina View and cash outlay for acquisition of Tropicana Gardens Mall, we nonetheless think that net gearing should remain at current level of 70% or trend lower, supported by a stronger ringgit and potential revaluation gain in end-FY25. Maintain forecasts and our conviction BUY call with a higher TP of RM3.90 (from RM3.60) based on a lower 35% discount (from 40%) to our estimated RNAV of RM6.00.

Analyst:  
Tan Kai Shuen, CFA
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$KLSE-IOIPG 
Research by HLIB
BUY – TPRM3.90

" Interest cost savings from Fed rate cuts ”

The recent 50 bps rate cut by the FOMC augurs well for IOIPG, given that it has 82% of its debt denominated in SGD, mostly at floating rates. Note that Singapore interest rates tend to move in tandem with US interest rates. A 50 bps reduction in interest rate could translate to an annual interest saving of SGD22.5m (RM74.4m). Further savings are expected when more rate cuts materialize. While we anticipate further debt drawdown for Marina View and cash outlay for acquisition of Tropicana Gardens Mall, we nonetheless think that net gearing should remain at current level of 70% or trend lower, supported by a stronger ringgit and potential revaluation gain in end-FY25. Maintain forecasts and our conviction BUY call with a higher TP of RM3.90 (from RM3.60) based on a lower 35% discount (from 40%) to our estimated RNAV of RM6.00.

Analyst:  
Tan Kai Shuen, CFA
kstan@hlib.hongleong.com.my

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)