UEMS (5148) : UEM Sunrise Bhd - Australian boost
Target RM2.44 (Stock Rating: ADD)
UEMS’s 9MFY14 results were broadly in line with expectations even though net profit made up only 37% of our FY14 forecast and 40% of consensus. 4Q14 results should be boosted significantly by land sale gains. UEMS sold RM641m worth of properties in 9M14, 32% of its full-year target of RM2bn. 4Q14 sales should also be strong, driven by the successful launch of its Australian project. We make no changes to our EPS forecasts, Add recommendation and target price basis of 30% discount to RNAV. Potential re-rating catalysts remain newsflow on the high-speed rail project and new catalytic projects in Nusajaya which can help revive interest in Iskandar Malaysia.
9M14 results in line
UEMS's annualised 9M14 net profit made up 37% of our FY14 forecast and 40% of consensus. We expect 4Q to be stronger and make up for the shortfall. The group is expected to recognise a substantial land sale gain in 4Q, including the RM533m joint venture with KL Kepong, the RM156m Motorsports City and RM50m from Horizon Hills. In line with expectations, UEMS did not propose any 3Q dividends.
9M14 new sales of RM641m
UEMS sold RM641m worth of properties in 9M14, a 59% yoy drop. 3Q14 sales declined 36% qoq and 12% yoy to RM202m. Of the 9M14 new sales, only 23% came from its Nusajaya projects vs. 63% in 9M13. Unrecognised revenue declined 7% qoq to RM2.84bn. UEMS is on track to meets its full-year sales target of RM2bn as the launch of the A$570m (RM1.62bn) Aurora Melbourne Central was well received, with bookings of 95% thus far. The group hopes to convert the bookings into sales and purchase agreements by 4Q.
Conference call highlights
The focus of the post-results conference call was the maiden Australian launch. Aurora Melbourne Central on La Trobe Street in Melbourne is an A$757m (RM2.15bn) integrated project that includes a 92-floor skyscraper with 941 residential units. UEMS has launched the residential block and will launch the retail and serviced apartments later on an en bloc basis. With the Australian project, the company’s 2014 sales target of RM2bn (revised lower from the original RM3.2bn after the 2Q results) appears achievable.
Source: CIMB Daybreak - 27 November 2014
Target RM2.44 (Stock Rating: ADD)
UEMS’s 9MFY14 results were broadly in line with expectations even though net profit made up only 37% of our FY14 forecast and 40% of consensus. 4Q14 results should be boosted significantly by land sale gains. UEMS sold RM641m worth of properties in 9M14, 32% of its full-year target of RM2bn. 4Q14 sales should also be strong, driven by the successful launch of its Australian project. We make no changes to our EPS forecasts, Add recommendation and target price basis of 30% discount to RNAV. Potential re-rating catalysts remain newsflow on the high-speed rail project and new catalytic projects in Nusajaya which can help revive interest in Iskandar Malaysia.
9M14 results in line
UEMS's annualised 9M14 net profit made up 37% of our FY14 forecast and 40% of consensus. We expect 4Q to be stronger and make up for the shortfall. The group is expected to recognise a substantial land sale gain in 4Q, including the RM533m joint venture with KL Kepong, the RM156m Motorsports City and RM50m from Horizon Hills. In line with expectations, UEMS did not propose any 3Q dividends.
9M14 new sales of RM641m
UEMS sold RM641m worth of properties in 9M14, a 59% yoy drop. 3Q14 sales declined 36% qoq and 12% yoy to RM202m. Of the 9M14 new sales, only 23% came from its Nusajaya projects vs. 63% in 9M13. Unrecognised revenue declined 7% qoq to RM2.84bn. UEMS is on track to meets its full-year sales target of RM2bn as the launch of the A$570m (RM1.62bn) Aurora Melbourne Central was well received, with bookings of 95% thus far. The group hopes to convert the bookings into sales and purchase agreements by 4Q.
Conference call highlights
The focus of the post-results conference call was the maiden Australian launch. Aurora Melbourne Central on La Trobe Street in Melbourne is an A$757m (RM2.15bn) integrated project that includes a 92-floor skyscraper with 941 residential units. UEMS has launched the residential block and will launch the retail and serviced apartments later on an en bloc basis. With the Australian project, the company’s 2014 sales target of RM2bn (revised lower from the original RM3.2bn after the 2Q results) appears achievable.
Source: CIMB Daybreak - 27 November 2014
