HLIB retains 'Buy' on UEM Sunrise as RM4bil industrial JV unlocks Johor landbank
KUALA LUMPUR: Hong Leong Investment Bank (HLIB) has maintained its “Buy” recommendation on UEM Sunrise Bhd, with an unchanged target price of 92 sen, based on a 60 per cent discount to its estimated revalued net asset value (RNAV) of RM2.30.
KUALA LUMPUR: Hong Leong Investment Bank (HLIB) has kept its Buy rating on UEM Sunrise Bhd, with a stable target price of 92 sen. The bank forecasts a 60% discount to the group's RM2.30 estimated revalued net asset value (RNAV). UEM Sunrise is partnering with AME Elite Consortium Bhd to create a RM4 billion industrial park in Johor through a 50:50 joint venture.
The deal involves selling 402.1 acres of land for RM972.1 million, or RM55.50 per square foot. HLIB expects land monetisation to help narrow the market's discount to UEM Sunrise's RNAV and support a share price increase. The project, expected to start in late 2027, will consist of industrial facilities, commercial spaces, workers' accommodation, and infrastructure.
AME will handle project and marketing management, while UEM Sunrise will take care of earthworks and master infrastructure. The JV is expected to generate an estimated RM47.4 million net gain for UEM Sunrise, reducing its pro forma net gearing to 0.30 times.
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