We raise our fair value to MYR4.25 and maintain our Trading Buy rating on the stock. 1Q13 results beat expectations on an annualised basis, mainly boosted by the completion of a land sale to Liberty Bridge. Property sales in 1Q13 amounted to MYR956m, making MYR3bn sales target looks fairly decent. We expect strong sales and news flow to continue drive the share price.

- Above expectations. ULHB’s 1Q13 earnings beat expectations on an annualised basis, as the land sale to Liberty Bridge amounted to MYR400.75m was completed during the quarter. Turnover from the property development was down by 46% qoq, largely due to the handover of MK28, Ujana in East Ledang, Phase 7A & 8B in Nusa Idaman in FY12, as well as the shorter working days in 1Q. Key projects that have contributed to earnings include East Ledang and Nusa Idaman.

- MYR956m sales achieved in 1Q13. 1Q13 property sales amounted to MYR956bn (excluding MYR500m sales from Quintet), comparable to MYR1.22bn achieved in 4Q, which is typically the strongest quarter in a year (sales were MYR290m in 1Q12). The sales were largely contributed by Teega and some other existing projects. We are confident that the sales target of MYR3bn will be achieved this year, on the back of MYR4bn (MYR3bn within Nusajaya and MYR1bn outside Nusajaya) worth of projects slated for launch this year. These include CS1 (mixed development, GDV MYR1.4bn), D’Estuary (residential development at Puteri Harbour, GDV MYR6bn – Phase one MYR192m) as well as new phases in East Ledang, Nusa Idaman and Nusa Bayu. MK22 and the Bangi township could also be launched this year. The Singaporeans or Malaysians working in Singapore, with strong purchasing power, will continue to drive sales in Iskandar.  

- Forecasts. Unchanged. Unbilled sales have increased substantially to MYR3.55bn, from MYR2.28bn in 4Q12.  

- Fair value raised to MYR4.25. The abundance of liquidity in the regional markets will continue to drive demand for property and land values. We, therefore, revise some of our land value assumptions in our RNAV estimate, and also update for the latest landbank data. Our fair value for ULHB is now raised to MYR4.25, based on an unchanged 15% premium to RNAV. We maintain our Trading Buy call on the stock.

Source: RHB