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Singapore Investment


UEMS 5148 UEM SUNRISE BERHAD set for robust revenue

PETALING JAYA: UEM Sunrise Bhd has the potential to book RM1.9bil to RM2bil in sales by year-end, says RHB Research.

This is given the group’s first half of 2023 (1H23) property sales of RM1.49bil, which already met its management target for the year, the brokerage firm noted.

In its latest report, RHB Research said UEM Sunrise launched RM2.7bil worth of properties year to date, inclusive of the Collingwood project in Melbourne, Australia, versus RM2.5bil planned initially.

“Demand for The Minh in Mon’t Kiara with a gross development value (GDV) of RM979mil and The Connaught One in Cheras with a GDV of RM747mil launched in June has been very encouraging,” it added.

Furthermore, UEM Sunrise management indicated that bookings and contractual sales have hit 45% and 49%, respectively, as at end-July.

“Given the momentum, we expect both projects to continue to drive sales in the second half of 2023 and UEM Sunrise will likely record RM1.9bil to RM2bil in sales by year-end,” it added.

On UEM Sunrise’s 2Q23 results, RHB Research said revenue grew quarter-on-quarter mainly due to the completion of two land disposals – RM29.9mil from its Tapah land and RM38.9mil from Plot B in Nusajaya Tech Park.

Meanwhile, finance costs rose during the quarter to RM44mil versus RM34mil in 1Q23, given the interest rate hikes over the past year. Net gearing improved slightly to 0.46 times from 0.47 times in 1Q23.

In addition, the unsold inventory continued to fall to RM146mil, from RM176mil in the previous quarter, as more units at its Verdi and Estuari Gardens projects were sold.

RHB Research has also maintained its financial year 2023 (FY23)-FY25 earnings forecasts on UEM Sunrise.

The unbilled sales rose to RM2.67bil, mainly due to the Collingwood project, versus RM1.7bil in 1Q23.

The brokerage has a “buy” call on UEM Sunrise with a higher target price of RM92 sen from RM70 sen previously.

“As the construction of the Johor Baru-Singapore Rapid Transit System link is providing good visibility of improvement in cross-border traffic in future, positive news flow on Iskandar Malaysia should continue to drive this stock’s re-rating,” it added.

It said UEM Sunrise used to trade at a 20% to 30% premium to its revalued net asset value in the previous property upcycle in 2011-2013.


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