Stock Name: UEMLAND
Company Name: UEM LAND HOLDINGS BHD
UEM Land Holdings Bhd
(Sept 8, RM2.09)
Initiating coverage with buy rating at RM2.07 with target price of RM2.70: With strong Khazanah Nasional Bhd parentage, we view UEM Land as one of the frontrunners for government land developments in Singapore and Malaysia. The positive merger with Sunrise has raised its profile given Sunrise's expertise in high-rise integrated developments and branding.
UEM Land is also starting to reap the fruit of its flagship developments in Iskandar Malaysia. We initiate coverage on UEM Land with a 'buy' and RM2.70 target price (20% discount to RM3.36 realisable net asset value). The broader market weakness offers opportunity to buy for the long term.
UEM Land is the frontrunner for government land developments, including the Rubber Research Institute of Malaysia's 1,214ha in Sungai Buloh. UEM Land is sitting on the advisory panel, assisting EPF in formulating the master plan for the land. The company has also submitted bids for other government land ' the 7.7ha Unilever land in Bangsar and 8.5ha Pudu jail redevelopment in Bukit Bintang West in Kuala Lumpur. The securing of these developments will provide a strong impetus to UEM Land's earnings and valuation.
We are excited over its appointment as project manager for the S$11 billion (RM27 billion) Marina South and Ophir-Rochor government land developments in Singapore. The earnings impact for a project manager role is minimal, at 3% to 4% of our earnings before interest and tax (Ebit) estimates, but we believe its presence in Singapore has a more positive impact, promoting UEM Land's RM19 billion of properties in Nusajaya (within Iskandar). UEM Land could also benefit from outright land sale by M+S Pte Ltd, if any.
Iskandar's property prices should be boosted by a better transport system (Singapore-Johor Bahru intra-city train and rail transit system) and warmer bilateral ties. We expect increasing relocation/outsourcing economic activities from the island republic due to relatively cheaper costs in Iskandar. Flagship projects in Johor (Pengerang, Tanjung Langsat) will provide the population growth and are re-rating catalysts for the property/land prices in Iskandar.
Our 24% three-year net profit compound annual growth rate is premised on RM1.6 billion unbilled sales (0.8 times 2012 forecasts) and RM1.9 billion to RM2.9 billion per year sales forecasts. It could benefit from the government-linked company's share divestment plan which will improve its trading liquidity. Our 20% discount is to reflect its large exposure in Nusajaya (73% of total landbank, 62% total gross development value). ' Maybank IB Research, Sept 8
This article appeared in The Edge Financial Daily, September 9, 2011.
Company Name: UEM LAND HOLDINGS BHD
| Research House: MAYBANK | Price Call: BUY | Target Price: 2.70 |
UEM Land Holdings Bhd
(Sept 8, RM2.09)
Initiating coverage with buy rating at RM2.07 with target price of RM2.70: With strong Khazanah Nasional Bhd parentage, we view UEM Land as one of the frontrunners for government land developments in Singapore and Malaysia. The positive merger with Sunrise has raised its profile given Sunrise's expertise in high-rise integrated developments and branding.
UEM Land is also starting to reap the fruit of its flagship developments in Iskandar Malaysia. We initiate coverage on UEM Land with a 'buy' and RM2.70 target price (20% discount to RM3.36 realisable net asset value). The broader market weakness offers opportunity to buy for the long term.
UEM Land is the frontrunner for government land developments, including the Rubber Research Institute of Malaysia's 1,214ha in Sungai Buloh. UEM Land is sitting on the advisory panel, assisting EPF in formulating the master plan for the land. The company has also submitted bids for other government land ' the 7.7ha Unilever land in Bangsar and 8.5ha Pudu jail redevelopment in Bukit Bintang West in Kuala Lumpur. The securing of these developments will provide a strong impetus to UEM Land's earnings and valuation.
We are excited over its appointment as project manager for the S$11 billion (RM27 billion) Marina South and Ophir-Rochor government land developments in Singapore. The earnings impact for a project manager role is minimal, at 3% to 4% of our earnings before interest and tax (Ebit) estimates, but we believe its presence in Singapore has a more positive impact, promoting UEM Land's RM19 billion of properties in Nusajaya (within Iskandar). UEM Land could also benefit from outright land sale by M+S Pte Ltd, if any.
Iskandar's property prices should be boosted by a better transport system (Singapore-Johor Bahru intra-city train and rail transit system) and warmer bilateral ties. We expect increasing relocation/outsourcing economic activities from the island republic due to relatively cheaper costs in Iskandar. Flagship projects in Johor (Pengerang, Tanjung Langsat) will provide the population growth and are re-rating catalysts for the property/land prices in Iskandar.
Our 24% three-year net profit compound annual growth rate is premised on RM1.6 billion unbilled sales (0.8 times 2012 forecasts) and RM1.9 billion to RM2.9 billion per year sales forecasts. It could benefit from the government-linked company's share divestment plan which will improve its trading liquidity. Our 20% discount is to reflect its large exposure in Nusajaya (73% of total landbank, 62% total gross development value). ' Maybank IB Research, Sept 8
This article appeared in The Edge Financial Daily, September 9, 2011.
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