KUALA LUMPUR (Oct 22): Public IB Bhd has reaffirmed its "outperform" call on UEM Sunrise Bhd with an unchanged target price of RM2.15 and a revalued net asset value (RNAV) inclusive of development profits at RM3.10 (RM13.30) per share.

In a note to clients, its analyst Tan Siang Hing said UEM Sunrise's stock price has rebounded by about 50% from its all-time low of 76 sen on privatisation rumours by its holding company while trading volume spiked accordingly.

"While no real way of knowing, the privatisation story might make sense by looking at the steep discount to its value.

"That said, we believe Khazanah Nasional Bhd will not 'take under' the company just because the sector is facing headwinds currently, primarily due to the bad press on its high exposure in Iskandar, Johor (c.78% of its total landbank).

"If anything, we believe that UEM Sunrise has low holding costs for its landbank in Iskandar, hence, should be able to weather through the current down cycle.

"We continue to like the stock and reaffirm our 'outperform' call with an unchanged RM2.15 target price," he said.

At 10.46am, the stock increased by 2.5% or three sen to RM1.23 after paring gains at early trade, with 12.8 million shares done for a market capitalisation of RM5.44 billion.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)