• Proposed disposal of land parcel . UEM sunrise’s wholly-owned subsidiary UEMS Alderbridge proposed to dispose three pieces of land parcel in Canada for C$113m (RM372.6m), which was bought at a price of CAD$70.2m in 2014. The disposal will increase UEMS’s EPS by circa 2 sen. With the disposal of lands in Canada, UEMS would be able to focus on domestic market in Malaysia and shift its international business focus to Australia where the group has two on-going projects and a third project within its current pipeline.

• Johor related GLC-linked theme play . With the recent huge IWCITY corporate deal, trading interest has emerged strongly within property developers which have land banks in Johor. Any revaluation of lands in the Johor vicinity would directly benefit the group. Besides that, UEMS is likely to be attractive to be one of the potential GLC-linked theme play over the near term.

• Technical outlook. Price has experienced a symmetrical triangle formation breakout above the RM1.20 level, accompanied by improved volumes. Both the weekly and daily MACD Indicators are trending positively above zero. Meanwhile, the RSI is hovering above 50. As the price has rebounded off the downward trendline, we may expect follow through buying interest over the near term, targeting the RM1.35-RM1.42 levels, followed by LT objective target of RM1.51. Support will be pegged around RM1.16-RM1.19, while cut loss will be initiated if price violates below RM1.13.

Source: Hong Leong Investment Bank Research - 14 Mar 2017