PublicInvest Research

Author: PublicInvest   |   Latest post: Mon, 18 Jan 2021, 11:45 AM


UEM Sunrise Berhad - Below Expectations

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UEM Sunrise (UEMS) registered another loss in 3QFY20 after reporting a disappointing RM28.9m loss (-206.5% YoY, -69.1% QoQ) due to slower-thanexpected billings and absence of land sale gains. YTD, Group net loss was at RM144.2m which is again below our and consensus estimates. Now that the expected completion of land sale is only likely to happen in FY21, we believe the Group is unlikely to overturn its losses this year. As such, we cut our FY20/21 estimates by 325%/16% as we adjust our billing assumptions. Sales (inclusive of bookings) are estimated at c.RM700m in 9MFY20 with the bulk coming from Residensi AVA, Serene Heights, Solaris Parq and Astrea. The Group is still maintaining its FY20 sales target at RM1bn nonetheless, given the proposed launch of Allevia at Mont Kiara which is said has received good response at its soft launch. Maintain our Neutral call with an unchanged TP of RM0.55, pegged at c.75% discount to RNAV.

  • Group revenue dropped 33.6% YoY, which was mainly driven by property development projects from the Central region (RM206.5m or 39% of total revenue) such as Residensi Solaris Parq, Serene Heights Bangi and Kiara Kasih. Southern region (RM139m or 26% of total revenue) projects were mainly from Aspira ParkHomes, 68 Avenue and Denai Nusantara. The remaining property development revenue was from International projects in Australia such as Aurora Melbourne Central and Conservatory.
  • Uninspiring sales. With the lack of meaningful launches, new sales clinched YTD were still slow at RM374m (with launches to-date at RM250m only). The Group plans to launch another RM700m before the end of the year with the bulk from Residensi Allevia in Mont’Kiara (estimated GDV of RM545m). The other project in the pipeline is Senadi Hills in Iskandar Puteri, with a total GDV of RM100m and Serene Heights Bangi, phase 1F worth RM50m. Elsewhere, the Group is focusing on offloading its inventories which, as at 30 September 2020, are valued at RM498m. Unbilled sales remained steady at RM1.7bn. Separately, the Group’s proposed land monetization deals such as stake reduction in a JV to KLK Land (RM183m), Tapah land disposal (29.9m) and SILC land disposal (RM434m) is only likely to materialize in 2021.

Source: PublicInvest Research - 25 Nov 2020

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