-  Maintain BUY on UEM Sunrise with a lower fair value of RM2.97/share, as we double the discount attached to its NAV/share to 30% to reflect weaker sentiment on property stocks over the near term.

-  UEM Sunrise’s 9M13 net profit doubled to RM501mil. This included recognitions from land sales to Southern Marina Development Sdn Bhd (TM2/TM3: Puteri Harbour) and Singapore’s Ascendas (Phase 1 of Nusajaya Tech Park) totalling RM222mil that was booked in 3Q13.

-  Major profit contributors during the period were (i) land sales at Commercial North & TM2/TM3 Puteri Harbour); (ii) East Ledang and Nusa Idaman.

-  Ex-land sales, its revenue and bottomline stood at RM1.2bil and RM170mil respectively. This was mainly in- line with our expectations. However, our net profit for FY13F is tweaked slightly upwards (+3% YoY) to account for the Ascendas land deal.

-  UEM Land achieved new sales of RM2.1bil for the first nine month of FY13F (Nusajaya: ~RM1.5bil), putting the group firmly on track to achieve its full-year target of RM3bil. Unbilled sales stood at a healthy RM3.3bil (nearly 2x of FY12 property development revenue).

-  Some of UEM Sunrise’s key launches and their respective GDVs in 3Q13 include:- (i) Nusa Bayu (RM225mil); (ii) East Ledang (RM321mil); (iii) Nusa Idaman (RM82mil); and (iv) Residensi 22, Mt.Kiara (RM941mil).

-  The maiden preview for Residensi 22 was well-received with >60% taken up for the first of two blocks. Equally, registration of interest for the upcoming launch of Almas (CS-1) at Puteri Harbour has been strong with price points likely to be higher than Teega’s (average: RM700psf).

-  Following a slew of cooling measures introduced recently to cap speculation on local properties, UEM Sunrise has moved sensibly to line up more landed products at affordable prices moving into 2014. The group is set to launch D’Estuary early next year, while landed projects in the Klang Valley include those in Bangi and Sinaran Heights.

-  We are also similarly encouraged with the progress made on Nusajaya Tech Park – where Ascendas has committed to acquiring some 120 acres under Phase 1. While key details (e.g. GDV) remained unknown at this juncture, the project could kick-off by 2H14 after it receives all the relevant approvals and infrastructure access.

-  Notably, management shared that Acendas received positive feedback from Singaporean SMEs, which are looking to relocate to Johor.

Source: AmeSecurities