KUALA LUMPUR (Feb 17): UEM Sunrise Bhd and Mulpha International Bhd saw their share prices rose as high as 6.25% and 9.62% respectively on a joint venture (JV) to develop three parcels of land in Nusajaya, Johor, which will have a combined gross development value (GDV) of RM5 billion.

At 10:30am, UEM Sunrise pared gains to trade at RM1.01, up five sen or 5.21%, with 12.88 million shares done; it was the fifth most actively traded counter. Mulpha also retreated to 28 sen, up two sen or 7.69%, with 9.61 million shares traded; it was the twelfth most actively traded counter.

Both parties inked the JV agreement yesterday, and UEM Sunrise managing director cum chief executive officer Anwar Syahrin Abdul Ajib said the 50:50 JV company will be developing the three parcels of land over 20 years.

Two parcels of land, which currently belong to UEM Sunrise, measure 129.79 acres in total. The development of the land, which is located next to Mulpha's Leisure Farm gated development, will be led by Mulpha.

Meanwhile, the remaining parcel of 65.48-acre land, located near Gerbang Nusajaya, will be developed by UEM Sunrise.

Planning for the development will commence in the second half of 2016, with Phase 1 of the project, having a GDV of RM150 million, expected to be launched in 2018.

The JV follows the two companies' maiden collaboration in May 2014, which saw UEM Sunrise and Mulpha's respective subsidiaries Nusajaya Rise Sdn Bhd and Leisure Farm Corp Sdn Bhd building and upgrading three sets of road works in Iskandar Malaysia.

Meanwhile, Hong Leong IB Research has upgraded UEM Sunrise to "hold" (from "sell") with an unchanged target price of 94 sen after UEM Sunrise entered into a JV agreement with Mulpha International to jointly develop 231-acre (140 acres owned by UEM Sunrise and the remaining 91 acres owned by Mulpha) freehold land located in Gerbang Nusajaya (near the Leisure Farm Resort) on the basis of 50:50 equity stake.

In a note today, the research house said with the base price indication, the UEM Sunrise land is valued at RM52 per square foot (psf) while Mulpha's land is valued at RM110 psf (based on net development area of 65 acres).

It said the difference in valuation is mainly due to the status of land title, ie UEM Sunrise's lands are still held under agricultural titles while Mulpha's lands are already converted to commercial parcels.

"We estimate this JV development to result in an effective NPV of RM93 million to UEM Sunrise. Overall, neutral impact to RNAV.

"Given the recent retracement of UEM Sunrise's share price that is already close to our target price, we upgrade the stock from 'sell' to 'hold' with unchanged target price of 94 sen," it said.