POSITIVE OUTLOOK FOR UEM SUNRISE
Potential lies in conversion of 146ha of land into industrial zone
RHB Research has maintained its target price of RM1.60 for UEM Sunrise Bhd, even though the company has set lower sales targets for the year.
The research group is nevertheless optimistic about the company’s potential because it has the landbank with the best prospects in Iskandar Malaysia in Johor, making it easier to take advantage of expansion prospects and possibly increase profits.
A significant move by UEM
Sunrise involves the conversion of 146ha of land into an industrial zone, reflecting strategic planning to tap into industrial development opportunities.
This initiative aligns with the revised masterplan for Gerbang Nusajaya, where industrial components now constitute 28.3 per cent of the total new gross development project worth RM45 billion, a substantial increase from the previous 1.6 per cent of RM42 billion.
UEM Sunrise’s sizable undeveloped landbank of 1,214ha in the area, including joint ventures, is poised for potential re-rating.
RHB Research’s positive outlook is reinforced by a recent site visit to UEM Sunrise’s project site at Gerbang Nusajaya, reaffirming its bullish stance on the company’s prospects.
Additionally, the acquisition of land from Ascendas Land (Malaysia) towards the end of 2022 signals robust demand for industrial development.
The immediate conversion of the 146ha land underscores proactive efforts, suggesting that potential deals may already be in discussion, with expectations for some to materialise in the coming months.
RHB Research has kept its “buy” call on the stock.