IGB BERHAD [%tpfk%] 
Research by Kenanga
Neutral; h Target Price RM3.20; Expected Return +14%

Below Expectations

IGB Berhad (IGB) delivered a weaker-than-expected 2QFY18 net profit of
RM41.3m (-10.9% YoY, +21.0% QoQ). In 1H2018, the Group’s net profit of
RM75.3m (-36.9% YoY) only constituted c.39% of our full year estimates.
The disparity is due to our profit forecast for its hotel division which was a tad
too aggressive as we understand average occupancy rates for most of its
local hotels have dropped YTD, resulting in a 6% YoY drop in hotel revenue.
As such, we adjust our FY18-20 downwards by 13%/4%/5% to account for
lower contribution from hotel division. Maintain Neutral recommendation and
TP of RM3.20, pegged at c.60% discount to our RNAV estimates

Tan Siang Hing
T 603 2268 3016
F 603 2268 3014
E [%kHGC%]

IGB BERHAD $KLSE-IGB 
Research by Kenanga
Neutral; h Target Price RM3.20; Expected Return +14%

Below Expectations

IGB Berhad (IGB) delivered a weaker-than-expected 2QFY18 net profit of
RM41.3m (-10.9% YoY, +21.0% QoQ). In 1H2018, the Group’s net profit of
RM75.3m (-36.9% YoY) only constituted c.39% of our full year estimates.
The disparity is due to our profit forecast for its hotel division which was a tad
too aggressive as we understand average occupancy rates for most of its
local hotels have dropped YTD, resulting in a 6% YoY drop in hotel revenue.
As such, we adjust our FY18-20 downwards by 13%/4%/5% to account for
lower contribution from hotel division. Maintain Neutral recommendation and
TP of RM3.20, pegged at c.60% discount to our RNAV estimates

Tan Siang Hing
T 603 2268 3016
F 603 2268 3014
E tan.sianghing@publicinvestbank.com.my