This article first appeared in The Edge Financial Daily on November 1, 2019

UEM Sunrise Bhd
(Oct 31, 68.5 sen)
Maintain hold with an unchanged target price (TP) of 74 sen: We attended the unveiling of UEM Sunrise Bhd’s upcoming flagship development, Kiara Bay. Below are the key takeaways.

Spanning across 73 acres (29.54ha) of land beside the Kepong Metropolitan Park, Kiara Bay will be an integrated township comprising residential units, a retail mall, office space, hotels, healthcare centres and education hubs. It will consist of three districts: The Waters (the lakefront district), The Walk (commercial) and The Village (residential). The development’s strategic location will allow its residents to enjoy a 140-acre lake right beside the development alongside jogging and cycling tracks within the park. Kiara Bay will be developed over 20 years and garner an estimated gross development value of RM15 billion.

Connectivity includes the Damansara-Puchong Expressway, North-South Expressway, Duta-Ulu Kelang Expressway and Jalan Kuching. UEM Sunrise will also build two interchanges to connect the development to the Kuala Lumpur Middle Ring Road 2, with the first interchange ready before the completion of its first project within the development. With regard to public transportation, two mass rapid transit stations (Kepong Baru and Jinjang) will be close to Kiara Bay and are scheduled to operate by 2021.

The first project to be launched soon in Kiara Bay consists of two residential blocks and is targeted to be completed by the fourth quarter of 2023. The project will comprise 870 residential units with built-up areas ranging from 800 sq ft to 1,250 sq ft, priced between RM500,000 and RM900,000. To cater to the first batch of residents, an interim structure will be built to house retail stores (including a grocer) which will be transferred to the retail mall upon completion.

Our forecasts remain unchanged pending further information on the revised land area.

We reiterate our “hold” rating with an unchanged TP of 74 sen based on a 70% discount to an estimated revised net asset value of RM2.47. — Hong Leong Investment Bank Research, Oct 31