UEMS (5148) - UEM sees flattish revenue in 2015
By Hong Leong Investment Bank Bhd / The Edge Financial Daily | May 6, 2015 : 11:00 AM MYT
UEM Sunrise Bhd
(May 5, RM1.33)
Maintain hold with unchanged target price (TP) of RM1.58: We attended a briefing organised by UEM Sunrise, led by the group’s managing director and chief executive officer Anwar Syahrin Abdul Ajib last Thursday, to recap on the group’s financial year 2014 (FY14) performance, growth strategy as well as going forward launches.
The management shared that the group’s FY15 sales target is between RM2 billion and RM2.4 billion (FY14: RM2.4 billion).
As for revenue guidance, UEM Sunrise is expecting flattish revenue year-on-year (y-o-y) with net profit to reach RM500 million to RM550 million.
Despite that the group’s FY15 profit target exceeding our forecasts by 5% to 16%, we continue to maintain our forecasts as we remain conservative given such a challenging sector outlook for the year.
Out of the RM2.4 billion sales target for FY15, about RM1.2 billion is expected to be derived from domestic sales (RM700,000 million from Johor and RM500,000 million from the central region) while the remaining from international sales.
Although no sales figure for the first quarter of FY15 (1QFY15) was mentioned, the management highlighted that sales during the quarter were satisfactory as they exceeded the group’s internal expectations despite having no launches in 1QFY15.
Launches in FY15 would include Serene Heights, Residensi Sefina, Denai Nusantara, Estuari Puteri Harbour, Solaris 3, Artisan Hill, Conservatory Australia, Signature Residences and Almas Suites. Total launches planned for the year are estimated to be close to RM3.7 billion.
With the group’s gearing level at 0.37 times, UEM Sunrise will continue to be on the lookout for further strategic land banking acquisitions.
We understand that RM1 billion will be allocated annually for a land banking exercise, either in the Klang Valley, northern region, Sabah and Sarawak or internationally.
Risks are a slowdown in Nusajaya sales, failure to achieve the sales target, high beta stocks. Forecasts are unchanged, pending the results to be released on May 21.
Positives are a highly liquid proxy to the property sector, a large war chest for land bank acquisitions and rich in news flow. Negatives are a share price that is highly news driven, vulnerable to an external slowdown, and highest price-earnings ratio (PER) multiples in the sector (more than two times sector average).
Maintain “hold” with an unchanged TP of RM1.58 based on unchanged 15.1 times FY15 PER or a 50% discount to revalued net asset value. — Hong Leong Investment Bank Bhd, May 5
http://www.theedgemarkets.com
By Hong Leong Investment Bank Bhd / The Edge Financial Daily | May 6, 2015 : 11:00 AM MYT
UEM Sunrise Bhd
(May 5, RM1.33)
Maintain hold with unchanged target price (TP) of RM1.58: We attended a briefing organised by UEM Sunrise, led by the group’s managing director and chief executive officer Anwar Syahrin Abdul Ajib last Thursday, to recap on the group’s financial year 2014 (FY14) performance, growth strategy as well as going forward launches.
The management shared that the group’s FY15 sales target is between RM2 billion and RM2.4 billion (FY14: RM2.4 billion).
As for revenue guidance, UEM Sunrise is expecting flattish revenue year-on-year (y-o-y) with net profit to reach RM500 million to RM550 million.
Despite that the group’s FY15 profit target exceeding our forecasts by 5% to 16%, we continue to maintain our forecasts as we remain conservative given such a challenging sector outlook for the year.
Out of the RM2.4 billion sales target for FY15, about RM1.2 billion is expected to be derived from domestic sales (RM700,000 million from Johor and RM500,000 million from the central region) while the remaining from international sales.
Although no sales figure for the first quarter of FY15 (1QFY15) was mentioned, the management highlighted that sales during the quarter were satisfactory as they exceeded the group’s internal expectations despite having no launches in 1QFY15.
Launches in FY15 would include Serene Heights, Residensi Sefina, Denai Nusantara, Estuari Puteri Harbour, Solaris 3, Artisan Hill, Conservatory Australia, Signature Residences and Almas Suites. Total launches planned for the year are estimated to be close to RM3.7 billion.
With the group’s gearing level at 0.37 times, UEM Sunrise will continue to be on the lookout for further strategic land banking acquisitions.
We understand that RM1 billion will be allocated annually for a land banking exercise, either in the Klang Valley, northern region, Sabah and Sarawak or internationally.
Risks are a slowdown in Nusajaya sales, failure to achieve the sales target, high beta stocks. Forecasts are unchanged, pending the results to be released on May 21.
Positives are a highly liquid proxy to the property sector, a large war chest for land bank acquisitions and rich in news flow. Negatives are a share price that is highly news driven, vulnerable to an external slowdown, and highest price-earnings ratio (PER) multiples in the sector (more than two times sector average).
Maintain “hold” with an unchanged TP of RM1.58 based on unchanged 15.1 times FY15 PER or a 50% discount to revalued net asset value. — Hong Leong Investment Bank Bhd, May 5
http://www.theedgemarkets.com
