Highlights

UEM Sunrise - Unveiling of Kiara Bay

Date: 06/11/2019

Source  :  HLG
Stock  :  UEMS       Price Target  :  0.74      |      Price Call  :  HOLD
        Last Price  :  0.675      |      Upside/Downside  :  +0.065 (9.63%)
 


Spanning across 73 acres of land beside the Kepong Metropolitan Park, Kiara Bay will be an integrated township consisting of residential units, retail mall, office spaces, hotels, healthcare centres and education hubs. The first project to be launched soon will comprise of 870 residential units with built-up areas ranging from 800sqft-1250sqft priced between RM500k-RM900k. UEMS will also be building two interchanges to connect the development to the MRR2, with the first interchange to be ready before the completion of its first project within the development. Maintain forecasts and HOLD rating with an unchanged TP of RM0.79 based on a 70% discount to estimated RNAV of RM2.64.

We attended the unveiling of UEMS’ upcoming flagship development, Kiara Bay. Below are the key takeaways.

Kiara Bay. Spanning across 73 acres of land beside the Kepong Metropolitan Park, Kiara Bay will be an integrated township comprising residential units, retail mall, office spaces, hotels, healthcare centres and education hubs. Kiara Bay will consist of three districts i.e. The Waters (lakefront district), The Walk (commercial district) and The Village (residential district). The development’s strategic location allows its residents to enjoy a 140-acre lake located right beside the development alongside jogging and cycling tracks within the park. Kiara Bay will be developed over 20 years and garner an estimated GDV of RM15bn.

Connectivity. Connectivity to the development includes the Damansara-Puchong Highway, North-South Expressway, Duta-Ulu Kelang Expressway and Jalan Kuching. UEMS will also be building two interchanges to connect the development to the MRR2, with the first interchange to be ready before the completion of its first project within the development. With regards to public transportation, two MRT2 stations (i.e. Kepong Baru and Jinjang) will be the closest MRT points to Kiara Bay and is scheduled to operate by 2021.

Maiden launch. The first project to be launched soon in Kiara Bay will consist of two residential blocks and is targeted to complete by 4Q23. The project (4.4 acres) will comprise of 870 residential units with built-up areas ranging from 800sqft-1250sqft priced between RM500k-RM900k. To cater to the first batch of residence, an interim structure will be built to house retails stores (including a grocer) which will then be transferred to the retail mall upon completion.

Forecast. Unchanged pending further information on the revised land area. Maintain HOLD with an unchanged TP of RM0.74 based on a 70% discount to estimated RNAV of RM2.47. We see lack of near-term catalyst given the subdued sentiment for property outlook in Johor as well as potential bumpy earnings moving forward given the adoption of MFRS15 in the recognition of their overseas projects.

 

Source: Hong Leong Investment Bank Research - 6 Nov 2019

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Labels: UEMS

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UEMS 0.675 0.00 (0.00%) 52,100 

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