IOI Properties Group Exceeds Expectations in First Nine Months of FY26

IOI Properties Group Bhd (IOIPG) has reported a stronger-than-expected financial performance for the first nine months of its fiscal year ending June 2026. The company's results were bolstered by high profits from land sales in Melaka and enhanced contributions from its investment property portfolio.

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The performance makes the accumulated core net profit for the first nine months of FY26 increase by 122% year-on-year to RM623.5 million, equivalent to 78% of FY26 projections and 88% of Bloomberg consensus estimates, thus exceeding market expectations.

CGS International noted that IOIPG's core net profit surged by 30% quarter-on-quarter and 135% year-on-year to RM260.6 million in the third fiscal quarter of 2026. Revenue for the quarter reached RM1.05 billion, a 39% increase year-on-year. This performance brought the accumulated core net profit for the first nine months of FY26 to RM623.5 million, marking a 122% year-on-year increase. This figure represents 78% of the full-year FY26 projection and 88% of Bloomberg consensus estimates, significantly surpassing market expectations.

The improved performance is attributed to higher profit margins from land sales in Melaka. Transactions completed in FY24 generated RM130 million in revenue and RM119 million in operating profit (EBIT), yielding a margin of approximately 90%, which exceeded initial expectations of 70%. Furthermore, profit growth was supported by stronger contributions from the IOI Central Boulevard Towers (ICBT) in Singapore and the South Beach asset, which have been consolidated into the group's financial statements.

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The transactions obtained in FY2024 contributed RM130 million in revenue and RM119 million in operating profit (EBIT), representing a margin of around 90%, much higher than the initial expectation of 70%.

Excluding land sales, IOIPG recorded property sales of RM1.4 billion in the first nine months of FY26, a 20% increase year-on-year. Management remains confident in achieving the Malaysian property sales target of RM2 billion for FY26, driven by ongoing new project launches. The company also sees potential for further large-scale land sales from its industrial parks in Banting, Kulai, and Melaka. Following the better-than-expected results, CGS International raised its earnings per share (EPS) forecasts for FY26 to FY28 by 4% to 6%. The target price for IOIPG shares was also increased to RM4.51 from RM4.30, based on a narrower RNAV discount of 20%. However, the stock rating was downgraded from "Add" to "Hold" due to a 59% surge in share price since the beginning of the year up to May 28, 2026, which has pushed the valuation to a FY26 price-to-book ratio (P/BV) of 0.9 times, significantly higher than its 10-year historical average.

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Management is confident that the group is on the right track to achieve the Malaysian property sales target of RM2 billion for FY2026, supported by continuous new project launches.