UOAREIT (5110) : UOA Development - Missed launch and sales targets
Target RM2.18 (Stock Rating: HOLD)
UOA Dev's 9MFY14 core net profit was broadly in line with expectations as it made up 69% of our full-year forecast and 75% of consensus estimates. 9M new sales amounted to RM1.37bn, of which nearly half came from 3Q. However, UOA Dev is unlikely to match 2013's record sales of around RM2bn due to launch delays. This is a disappointment. We cut our FY15-16 EPS forecasts by 5-10% and downgrade the stock from Add to Hold, after widening the target basis from 20% discount to RNAV to 30% as we factor in the missed launch and sales targets. The relatively high dividend yield of 5-6% remains the key reason to hold on to the stock. For exposure to the property sector, investors should switch to Mah Sing Group.
9M results in line
UOA Dev’s 3Q results were broadly in line with expectations, as 9M core net profit made up 69% of our full-year forecast and 75% of consensus estimates. The group’s unbilled sales increased 13% qoq to RM1.8bn. As expected, UOA Dev did not propose any 3Q dividends, in line with its practice.
9M new sales of RM1.37m
In 9M, UOA Dev sold RM1.37bn worth of properties, down 13% yoy. The group sold RM672m worth of properties in 3Q, up 85% qoq and 192% yoy. The bulk of 9M sales came from Southview in Bangsar South (RM522m), Southbank in Old Klang Road (RM225m), Scenaria in Segambut, Desa Sentul in Jalan Sentul (RM181m) and Kencana Square (RM110m). 84% of its sales were residential properties, while only 16% were commercial properties.
Misses in launches
Earlier this year UOA Dev targeted six new launches in FY14 worth RM2.04bn, including the RM500m Southbank, the RM300m Southview second block, the RM340m Desa Sentul, as well as Jalan Ipoh, Desa Business Suites and Kepong V, each worth an estimated RM300m. The group has launched the first three projects but will postpone the rest to 2015 or later. The delayed launches means that UOA Dev is almost certain to miss its full-year sales target of around RM2bn by 10-20%. This is a big disappointment and shows that the property sector slowdown is hurting even strong developers such as UOA Dev. This is particularly true for commercial properties.
Source: CIMB Daybreak - 26 November 2014
Target RM2.18 (Stock Rating: HOLD)
UOA Dev's 9MFY14 core net profit was broadly in line with expectations as it made up 69% of our full-year forecast and 75% of consensus estimates. 9M new sales amounted to RM1.37bn, of which nearly half came from 3Q. However, UOA Dev is unlikely to match 2013's record sales of around RM2bn due to launch delays. This is a disappointment. We cut our FY15-16 EPS forecasts by 5-10% and downgrade the stock from Add to Hold, after widening the target basis from 20% discount to RNAV to 30% as we factor in the missed launch and sales targets. The relatively high dividend yield of 5-6% remains the key reason to hold on to the stock. For exposure to the property sector, investors should switch to Mah Sing Group.
9M results in line
UOA Dev’s 3Q results were broadly in line with expectations, as 9M core net profit made up 69% of our full-year forecast and 75% of consensus estimates. The group’s unbilled sales increased 13% qoq to RM1.8bn. As expected, UOA Dev did not propose any 3Q dividends, in line with its practice.
9M new sales of RM1.37m
In 9M, UOA Dev sold RM1.37bn worth of properties, down 13% yoy. The group sold RM672m worth of properties in 3Q, up 85% qoq and 192% yoy. The bulk of 9M sales came from Southview in Bangsar South (RM522m), Southbank in Old Klang Road (RM225m), Scenaria in Segambut, Desa Sentul in Jalan Sentul (RM181m) and Kencana Square (RM110m). 84% of its sales were residential properties, while only 16% were commercial properties.
Misses in launches
Earlier this year UOA Dev targeted six new launches in FY14 worth RM2.04bn, including the RM500m Southbank, the RM300m Southview second block, the RM340m Desa Sentul, as well as Jalan Ipoh, Desa Business Suites and Kepong V, each worth an estimated RM300m. The group has launched the first three projects but will postpone the rest to 2015 or later. The delayed launches means that UOA Dev is almost certain to miss its full-year sales target of around RM2bn by 10-20%. This is a big disappointment and shows that the property sector slowdown is hurting even strong developers such as UOA Dev. This is particularly true for commercial properties.
Source: CIMB Daybreak - 26 November 2014
