UEM Sunrise (UEMS) delivered 1QFY23 net profit of RM15.4m (-19.3%  YoY, -25.0% QoQ), which is at about 19% and 18% of our and consensus  estimates. Albeit lower than expectations, we still deem it as in line as we  expect subsequent quarters’ earnings to be better. All told, we maintain our Neutral call with TP unchanged at 33sen.

• 1QFY23 pre-sales at only RM168m, of which 61% are from Central  region projects such as Residensi Allevia, Symphony Hills in  Cyberjaya and Serene Heights while the remaining 39% was from  the Southern region, mostly from Estuari Gardens, Senadi Hills and  Aspira Square, all in Iskandar Puteri. As of 1QFY23, unbilled sales  stood at RM1.7bn. We understand that its inventories were further  reduced by 53% to RM176m during the quarter (from RM372m a  year ago) while its cash balances remained strong at RM1.1bn, a  35% increase YoY. Its net gearing remained moderate at 0.47x as of  31 March 2023.

• Looking to unveil projects worth RM2.5bn 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 (official  launch on 27 May, 2023 with RM979m GDV), and The Connaught  One (end-June with RM743m GDV) 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.

Source: PublicInvest Research - 19 May 2023