INVESTMENT HIGHLIGHTS

• FY17 earnings within expectations

• Higher earnings in FY17

• FY17 new property sales at RM1.3b

• Maintain BUY with an unchanged TP of RM2.80

FY17 earnings within expectations. UOA Development Berhad (UOADEV) FY17 core net income of RM401.4m (excluding one-off gain from re-measurement) came in within expectations, making up 101% and 102% of our and consensus forecast respectively. UOADEV announced dividend of 15sen per share or equivalent to dividend yield of 5.9%.

Higher earnings in FY17. UOADEV’s 4QFY17 earnings climbed 10%yoy to RM102.1m, bringing FY17 earnings to RM401.4m (+7.4%yoy). The higher earnings were mainly driven by earnings recognition of its ongoing projects namely United Point Residence, Sentul Point, Danau Kota Suite Apartment. Besides, sales of completed projects (Desa Green Serviced Apartment and Scenaria @ North Kiara Hills) also contributed to higher earnings. Meanwhile, 4QFY17 unbilled sales stood at RM1.37b (59% contributed by United Point while 38% contributed by Sentul Point), flattish against unbilled sales of RM1.41b in 3QFY17, providing earnings visibility of 1.3 years.

FY17 new property sales at RM1.3b. UOADEV recorded new property sales of RM375.8m in 4QFY17, higher than new sales of RM311.2m in 3QFY17 and new sales of RM270m in 4QFY16. That brought total new sales in FY17 to RM1.3b, which is within our new sales expectations. The total new sales in FY17 is lower than new sales of RM1.42b in FY16 as last year sales were supported by launches of Sentul Point (GDV: RM1.5b) and United Point Residence (GDV: RM1.5b). Meanwhile, 36% of new sales in FY17 were contributed by Sentul Point, 35% by United Point Residence, 15% by UOA Business Park and 14% by other projects. Meanwhile, UOADEV planned to launch projects with total GDV of RM1.89b in FY18. Key launches in FY18 include The Park Residence II (GDV: RM600m) and SouthLink (GDV: RM550m) in Bangsar South.

Maintain BUY with an unchanged TP of RM2.80. We make no changes to our earnings forecast for FY18. Our target price for UOADEV is unchanged at RM2.80, based on 10% discount to RNAV. We like UOADEV for its attractive dividend yield and healthy balance sheet. Property sales prospect of UOADEV will continue to be driven by launches of urbanbased affordable priced properties.

Source: MIDF Research - 22 Feb 2018