KUALA LUMPUR (May 14): IOI Corp Bhd rose as much as 7% to its highest in over two years  on the plantation firm's plan to list its real estate operations separately. The property unit is expected to have a minimum market value of some RM15 billion upon listing.

At 3.30pm, IOI Corp was traded at RM5.46 with some 7.5 million shares done after rising as much as 37 sen to RM5.70. This is the highest since April 2011, according to Bloomberg data.

IOI Corp said today it plans to list its real estate operations under IOI Properties Group Sdn Bhd on the Malaysian stock exchange.

According to IOI Corp, IOI Properties will have an expanded issued share base of some 3.28 billion shares upon listing. Based on an indicative issue price of at least RM4.46 a share,  IOI Properties is expected to have a market capitalisation of RM14.63 billion.

In a note, JP Morgan said a market value of between RM10 and RM15 billion for IOI Properties "looks somewhat aggressive".

This is because the market value indicates a price-to-earnings ratio (PER) of between 20 and 25 times 2014 earnings for IOI Properties. This compares to a PER of 16.7 times for the domestic property sector,  according to JP Morgan.

At a RM10 billion to RM15 billion market capitalisation range for IOI Properties, JP Morgan said its target price for IOI Corp rises to between RM4.90 and RM5.70 from RM4.10.

"This is on our base assumption of CPO (crude palm oil) at RM2,600 a tonne for the plantation division," the research firm said.