The establishment of the JS-SEZ and Gerbang Nusajaya’s (pictured here) robust connectivity have played a pivotal role in driving demand for UEM Sunrise’s residential developments, further enhancing the appeal of Iskandar Puteri.
PETALING JAYA: UEM Sunrise Bhd
is a key beneficiary of the Johor-Singapore Special Economic Zone (JS-SEZ) initiative, given its substantial 7,985-acre landbank in Johor.
Mercury Securities noted that 94% (7,470 acres) of the landbank is strategically located within Iskandar Malaysia (IM),presenting significant land monetisation opportunities for UEM Sunrise .
In a report, it said the surge in land transactions in Johor, particularly for data centre developments, along with heightened property demand, is driving these opportunities.
“Additionally, UEM Sunrise’s outlook is further enhanced by its robust pipeline of property launches in IM and the upcoming master plan approval for its 2,334-acre development in Gerbang Nusajaya by mid-2025,” it told clients in the report.
Mercury Securities noted that UEM Sunrise is currently trading at a significant 50% discount to revised net asset value (RNAV), leaving room for a re-rating.
This is underpinned by a robust outlook from the JS-SEZ initiative, an upwardly revised financial year ended Dec 31, 2024 (FY24), sales target of RM1.2bil (RM929mil sales achieved in the first nine months of FY24), and strong unbilled sales of RM2.9bil, representing 2.2 times its revenue.
The stock is demonstrating a continued uptrend following a significant correction after reaching its 52-week high in early May, Mercury Securities noted.
A swift recovery, aligned with renewed buying interest, has driven the stock into an upward trajectory, leading to a breakout from the triangle pattern.
With these bullish technical signals, the stock is poised to test key resistance levels at RM1.14 and RM1.21.
The recommended entry zone is RM1.07 to RM1.08, with a stop loss at 97 sen, Mercury Securities said.
The JS-SEZ was formalised last week with the signing of a joint agreement between Malaysia and Singapore.
Following this, Mercury Securities noted that the Finance Ministry also announced tax incentive packages for both workers and investee companies.
“We think this bilateral cooperation between two countries is poised to catalyse a surge in foreign direct investment, drive relocation of Singapore-based firms to Johor (mitigate expansion cost in Singapore), and boost cross-border travel fuelled by enhanced connectivity.
“In our view, these developments are likely to create a positive spillover, propelling the real estate demand in Johor,” it added.
For the third quarter ended Sept 30, 2024, the company’s net profit surged to RM22.99mil from RM8.34mil in the previous corresponding period, while revenue rose to RM369.33mil from RM312.35mil a year earlier.
Basic earnings per share stood at 0.45 sen compared with 0.17 sen previously.
