KUALA LUMPUR (Nov 12): Hong Leong IB Research (HLIB) has downgraded Tambun Indah Land Bhd (TILB) to  Hold with a lower target price of RM2.14 (from RM2.60) after TILB announced that the 209.5 acres of land acquisition in Seberang Prai had been terminated.

In a note Wednesday, HLIB said there was no financial impact over the short-term as the intended development on the land was expected to commence 4-5 years later.

However, HLIB said it was negatively surprised by the announcement by TILB given that the land acquisition would further boost the group’s landbank in Pearl City by more than 40%.

It said TILB would be refunded the RM15 million deposit paid, without interest.

“Despite that, TILB will continue to seek for more opportunities to build up its landbank further for future intended developments.

“Forecasts remained unchanged. Target price however is reduced to RM2.14 (from RM2.60) as we have earlier factored in the potential development’s GDV. Recommendation is downgraded to Hold,” it said.