- Maintain BUY on UEM Sunrise with an unchanged fair value of RM3.61/share (15% discount to its NAV). UEM Sunrise’s 1H13 net profit rose by 97% YoY to RM318mil, accounting for 58% of both consensus and our FY13F forecast.

- The large jump in bottomline was largely due to the land sale gains in Puteri Harbour (44 acres) that was booked in 1Q13. Unbilled sales stood at a sturdy RM3.3bil (c. 2.1x FY12 property development revenue). Furthermore, the group is set to book in another gain of RM81mil from another land sale at Puteri Harbour to Southern Marina Development Sdn Bhd (Kuok Brothers) by 4Q13.

- Ex-land sales, 2Q13 gross earnings (before interest expenses) surged by 80% QoQ to RM162mil (1H13: RM252mil) on strong billings from key ongoing projects i.e. Commercial North Land, East Ledang and Nusa Idaman.

- New property sales more than doubled to RM1.7bil (1Q13: RM753mil; 2Q13: RM956mil) vs. RM702mil in 1H12. The bulk of this (~RM1.4bil) came from its Nusajaya projects.

- Two of the major launches in 1H13 include: (i) Nusa Bayu (GDV: RM190mil); and (ii) East Ledang (GDV: RM319mil). Moving into 2H13, its pre-sales momentum is set to accelerate with c.RM3.5bil worth of new launches that could be put into the market as early as next month.

- Given its strong pipeline of launches, we believe UEM Sunrise is on track to meet its new sales target of RM3bil for FY13F (FY12: ~RM2.5bil). Key projects are MK22, Nusa Idaman and Nusa Bayu.

- MK22 is set to debut soon with an indicative GDV of RM866mil. We understand that registration of interest has been strong. On the flipside, there may some delays in the rollout of the D’Estuary and Bangi projects – although both only account for 9% of remaining launches for 2H13.

- The commercialisation of Gerbang Nusajaya is fast taking shape and its overall development plan could be approved by 3Q13. First off the block is UEM Sunrise’ JV with Ascendas for an industrial park at Gerbang.

- However, the Motorsports City project (JV with Singapore billionaire Peter Lim) is still at the planning stage and any tangible newsflow is only expected in 2014.

- Maintain BUY on UEM Sunrise as our top large cap proxy for the property sector. We leave our FY13F net profit forecast of RM552mil unchanged (+24% YoY). There could be more upside if the c.RM70mil sale of the first parcel of land to Ascendas at Gerbang is completed by year-end.

Source: AmeSecurities