UEM Sunrise’s (UEMS) 4QFY22 net profit came in at RM20.5m which was within our and consensus expectations. Group FY22 net profit of RM80.5m (vis-a-vis FY21 net loss of RM213m) constituted 108% and 100% of our and consensus full year estimates, driven mainly by local property development activities, sale of 33 industrial plots in SiLC phase 3 and divestments of non-strategic plots of land. As expected, the Group missed its FY22 sales target after clinching only RM924m pre-sales as its planned launches were delayed due to slower than expected authority approvals. It has set a sales target of RM1.5bn for FY23, and aims to launch projects worth RM2.5bn during the year. Elsewhere, unbilled sales as at 4QFY22 stood at RM1.8bn (from RM2.2bn in 3QFY22). All told, we maintain our Neutral call with TP unchanged at 33sen.

• FY22 revenue rose 24% YoY to RM1.47bn, driven mainly by property development activities, land sales and asset divestments, as well as property investments. Key revenue contributors, development-wise, are Residensi Solaris Parq in Dutamas, Serene Heights in Semenyih, Residensi AVA in Kiara Bay, Residensi Astrea in Mont’Kiara, Senadi Hills in Iskandar Puteri and Residensi Allevia in Mont’Kiara. Meanwhile, Group revenue was also lifted by completion of the sale of industrial plots in Phase 3 of the Southern Industrial and Logistics Clusters(SiLC) and the divestment of a few non-strategic plots of land. We understand that it also managed to reduce its inventories by 49% YoY to RM203.0m.

• Aims to sell RM1.5bn in FY23. The Group has lined up launches worth RM2.5bn in FY23. The projects to be unveiled, among others, include The Minh in Mont’Kiara, and The Connaught One in the Central region. Meanwhile, new phases of landed homes will be launched in Senadi Hills, Aspira LakeHomes and a new development code named Res 7 in Gerbang Nusajaya in the Southern region. Outside Malaysia, it has plans for the AUD250m development in Collingwood, Melbourne. Unbilled sales at 4QFY22 stood at RM1.8bn.

Source: PublicInvest Research - 24 Feb 2023