KUALA LUMPUR (Apr 16): CIMB IB Research has maintained its “Hold” rating on UEM Sunrise Bhd at 94 sen with a lower target price of RM1.03 (from RM1.20) and said UEM Sunrise entered a conditional shareholders’ subscription agreement with Mega Legacy (MLM) to jointly develop 72.7 acres of land in Kepong. Estimated GDV of the land is RM15 billion.

In a note today, the research house said the 72.7 acres, consisting of 10 parcels on lease for 99 years, will be acquired by MLM from Datuk Bandar for a purchase consideration of RM416.4 million.

“The deal is positive for the group as it will increase its landbank in Kuala Lumpur and the expected development period of c.15 years will ensure a stable revenue stream.

“Maintain Hold. Our target price is cut to RM1.03 as we widen our RNAV discount to 70% from 65% previously, factoring in the rising interest rate environment,” it said.