After a rough two years (2020/2021) due to the pandemic, I-Berhad, the developer of the RM10 billion i-City ultrapolis in Selangor, is expected to perform better this year and beyond.

The company reported a net profit of RM5.3 million for the fourth quarter ended December 31, 2021 (4Q FY21), representing a year-on-year (YoY) increase of more than 100 per cent and a quarter-on-quarter increase of 61.8 percent (QoQ).

According to PublicInvest Research, this was accomplished as a result of a significant turnaround in the performance of the leisure segment following MCO 3.0.

"Despite numerous operating challenges faced, the company managed to remain profitable in FY21 with a net profit of RM369,000 recorded, helped in part by fair value gains," it said in a note on Monday, February 28.

The earnings, however, only make up 10 per cent of PublicInvest Research's full-year estimates.

"That said, we keep forward estimates unchanged on the expectation of a more robust recovery in its overall performance in the year ahead, with all three key segments seeing traction in its recovery momentum.

"We like I-Berhad's long-term value proposition underpinned by a remaining 60 per cent of its gross development value (GDV) yet to be realised, though we retain our neutral call in the absence of near-term re-rating catalysts," the research firm said.

The firm's target price remains unchanged at 26 sen, based on an 80 per cent discount to the fully-diluted revalued net asset value.

I-Berhad's property development segment earned RM13.1 million in revenue for the quarter (4Q FY21), primarily from the completion of the Hill10 residence project and sales of its most recent development, BeCentral.

However, a pre-tax loss of RM8.5 million was reported, owing primarily to the early stages of BeCentral's construction.

According to PublicInvest Research, unbilled sales were RM39.3 million at the end of December (September 2021: RM32.9 million), which is an encouraging sign.

The property investment segment reported a pre-tax profit of RM11.2 million due in large part to a revaluation surplus.

The group's leisure segment roared back into action post-lockdown, with revenue and pre-tax profit of RM11.8 million and RM3.8 million reported respectively for the quarter.

I-Berhad's business prospects and overview

Malayan Banking Bhd (Maybank) has been secured as the anchor tenant for i-City's first corporate smart office tower, occupying 14 floors.

Multinational corporations, insurance firms, and international logistics players are also housed in the Grade A and GBI rated tower.

According to PublicInvest Research, occupancy is now at 80 per cent, a significant improvement considering the building has only been in operation for a year.

Footfall to the Central i-City mall has also increased, with a tenancy rate of 85 per cent, according to the firm.

It also said that sales from BeCentral, which has yet to be officially launched, are being recognised and are reflected in the group's rising unbilled sales amount.

PublicInvest Research said that the DoubleTree by Hilton (with 300 room keys), slated to open its doors in the middle of this year, will contribute further to I-Berhad's property investment portfolio.

"While the financial impact is not exactly quantifiable at this juncture, the group's recent announcements of tie-ups with Huawei and China Mobile International Malaysia is positive and solidifies its deeper push into the technological sphere, which is a defining factor for its developments," the firm said.

In a filing with the Bursa Malaysia last month, I-Berhad stated that the vibrancy of i-City as a financial hub, as demonstrated by the widespread presence of industry leaders, would help boost confidence in the development's further expansion.

According to the property company, efforts will be made to attract more leading and pioneering projects to set up shop in i-City.

The addition of the corporate smart office tower and DoubleTree by Hilton Hotel to the existing Central i-City shopping mall, Best Western i-City Hotel, residential towers, data centre, convention centre, and leisure theme park (with the anticipated inclusion of the Metaverse experience) will solidify the company's vision to elevate the capital city to greater heights by introducing new ways for its community to live, play, and work.

I-Berhad said BeCentral, which is being built next to DoubleTree by Hilton Hotel and Central i-City shopping mall with an estimated GDV of RM700 million, shall be the next catalyst in forming the perfect launchpad in elevating i-City to experience unprecedented growth and to witness greater heights in the coming future.