UEM Sunrise chief executive officer Sufian Abdullah.
KUALA LUMPUR: UEM Sunrise Bhd
is expected to see a pick-up in earnings in the second half of this year, supported by the launches of sizeable projects.
Hong Leong Investment Bank (HLIB) Research noted that potential launches for the remainder of the year include The MINH, Connaught One and the new phase of Kiara Bay, which collectively amount to RM2.37bil in gross development value.
“The MINH recorded an encouraging take-up rate of 70% (inclusive of signed sale and purchase agreements and bookings) for its Tower 1 prior to its official launch.
“The project should continue to be well received, given its much-sought-after address in Mont’ Kiara.”
Additionally, HLIB Research said the company’s Connaught One project should also be well-received, given its mid-range pricing and transit-oriented development next to the Taman Connaught MRT station.
Meanwhile, UOB Kay Hian (UOBKH) Research said the outlook for property developers that focus on high-rise and premium residential homes could be challenging.
It noted that around 50% of UEM Sunrise’s projects are above RM1mil.
“This is as buying activities are expected to see a slowdown following the recent interest rate hike.
“We believe the depressed valuation should reflect the structural issues of the company, such as large undeveloped land banks in Johor and Perak.”
However, UOBKH Research said the development of rapid transit projects between Johor and Singapore will help to spur buying activities in the Iskandar region.
“This may eventually attract the interests of inventors back to the company on the positive prospects of Johor’s property landscape ahead.”
For the first quarter ended March 31, 2023 (1Q23), UEM Sunrise’s revenue declined by 42.2% year-on-year (y-o-y) to RM240.8mil.
Net profit decreased by 19.3% y-o-y to RM15.4mil or an earnings per share of 0.30 sen.
Maybank Investment Bank Research said the company’s 1Q23 earnings were “in line.”
“UEM Sunrise has locked in RM168mil sales in 1Q23 (60% from Klang Valley, 40% from Johor) or just 11% of its financial year 2023 (FY23) sales target of RM1.5bil.
“The weaker sales achieved was mainly due to the lack of new launches.”
The research house said it is maintaining its earnings forecasts and RM1.5bil sales assumption for FY23.
