UOADEV (5200) - UOA Development - Not achieving its full potential
Target RM2.18 (Stock Rating: HOLD)
UOA Dev's 4Q14 core net profit was in line with expectations as it made up 104% of our full-year forecast and 102% of consensus estimates. New sales of RM1.64bn were 19% below 2013’s record sales and its 2014 target of around RM2bn. The shortfall was due to launch delays for several projects. For 2015, UOA Dev may not even match 2014's new sales given the tougher property market conditions. We fine-tune our FY15-16 EPS estimates by -3% to 0.1% for housekeeping purposes. Our target price basis remains unchanged at a 30% discount to RNAV. The relatively high dividend yield of 6-7% remains the key reason to hold on to the stock. For exposure to the property sector, investors should switch to Mah Sing Group.
Final results in line
UOA Dev’s final results were in line with expectations, as core net profit exceeded our full-year forecast by 4% and consensus estimates by 2%. However, we are disappointed that the group’s core net profit declined for the first time since the company's IPO in 2011. Both 4Q and FY14 core net profits were lower yoy. UOA Dev proposed its first and final net dividend of 13 sen, above our forecast of 11 sen and at the same level as 2013.
New sales of RM1.64bn
UOA Dev sold RM1.64bn worth of properties in 2014, down 19% yoy. It sold RM270m worth of properties in 4Q, down 60% qoq and 40% yoy. The bulk of sales came from Southview in Bangsar South (RM546m), Scenaria in Segambut (RM65m), Southbank in Old Klang Road (RM257m), Desa Sentul in Jalan Sentul (RM214m), Vertical Office Suites in Bangsar South (RM114m) and Kencana Square (RM106m). 83% of its sales were residential properties, while only 17% were commercial properties. The group’s unbilled sales increased 11% qoq to RM2bn.
2015 launch targets
For 2015, UOA Dev aims to launch only three new projects, including the RM300m Desa Business Suites, the RM300m Kepong V Phase 1 and the RM120m North Kiara Boulevard. The group will also start pre-leasing the office space in its upcoming RM1bn Vertical Corporate Towers, which will be the group's new headquarters. In terms of new sales for 2015, UOA Dev is cautious that it may not even match 2014's sales.
Source: CIMB Daybreak - 26 February 2015
Target RM2.18 (Stock Rating: HOLD)
UOA Dev's 4Q14 core net profit was in line with expectations as it made up 104% of our full-year forecast and 102% of consensus estimates. New sales of RM1.64bn were 19% below 2013’s record sales and its 2014 target of around RM2bn. The shortfall was due to launch delays for several projects. For 2015, UOA Dev may not even match 2014's new sales given the tougher property market conditions. We fine-tune our FY15-16 EPS estimates by -3% to 0.1% for housekeeping purposes. Our target price basis remains unchanged at a 30% discount to RNAV. The relatively high dividend yield of 6-7% remains the key reason to hold on to the stock. For exposure to the property sector, investors should switch to Mah Sing Group.
Final results in line
UOA Dev’s final results were in line with expectations, as core net profit exceeded our full-year forecast by 4% and consensus estimates by 2%. However, we are disappointed that the group’s core net profit declined for the first time since the company's IPO in 2011. Both 4Q and FY14 core net profits were lower yoy. UOA Dev proposed its first and final net dividend of 13 sen, above our forecast of 11 sen and at the same level as 2013.
New sales of RM1.64bn
UOA Dev sold RM1.64bn worth of properties in 2014, down 19% yoy. It sold RM270m worth of properties in 4Q, down 60% qoq and 40% yoy. The bulk of sales came from Southview in Bangsar South (RM546m), Scenaria in Segambut (RM65m), Southbank in Old Klang Road (RM257m), Desa Sentul in Jalan Sentul (RM214m), Vertical Office Suites in Bangsar South (RM114m) and Kencana Square (RM106m). 83% of its sales were residential properties, while only 17% were commercial properties. The group’s unbilled sales increased 11% qoq to RM2bn.
2015 launch targets
For 2015, UOA Dev aims to launch only three new projects, including the RM300m Desa Business Suites, the RM300m Kepong V Phase 1 and the RM120m North Kiara Boulevard. The group will also start pre-leasing the office space in its upcoming RM1bn Vertical Corporate Towers, which will be the group's new headquarters. In terms of new sales for 2015, UOA Dev is cautious that it may not even match 2014's sales.
Source: CIMB Daybreak - 26 February 2015
