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This article first appeared in The Edge Financial Daily on November 30, 2018

UEM Sunrise Bhd
(Nov 29, 72.5 sen)
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UEM Sunrise Bhd (UEMS) registered a cumulative nine months ended Sept 30, 2018 (9MFY18) net profit of RM236.3 million  (+27.3% year-on-year [y-o-y]) after stripping off exceptional items such as foreign translation differences and cash flow hedge.

 

Despite making up 90.3% and 87.3% of our and consensus forecasts, we reckon this to be in line with expectations as we anticipate lower profit in fourth quarter financial year 2018 (4QFY18) due to the absence of land sale except for the sale of land to Kimlun Corp Bhd (RM82 million) which is pending approval.

3QFY18 revenue and core net profit of RM430.1 million and RM34.6 million respectively were mainly contributed by the Aurora Melbourne Central project, followed by Almas and Estuari Gardens, both located in Puteri Harbour, Iskandar Puteri in Johor.

The first separable portion of Aurora Melbourne Central (gross development value [GDV] of RM260.4 million) comprising 127 residences and 10 office suites was completed in 3QFY18 with a strong settlement rate of 92%.

UEMS is targeting to complete another 70 units (GDV RM85.2 million) by the end of 4QFY18.

UEMS chalked up new sales of RM900.5 million (+34% y-o-y) in 9MFY18, whereby 30% came from inventories while the remaining from ongoing projects namely Mayfair, Residensi Solaris Parq, Mayfair, Serimbun, Kiara Kasih and Symphony Hills.

With these, the company is on track to meet its annual target of RM1.2 billion. The unbilled sales of RM4.7 billion (RM4.9 billion in 2QFY18 will be progressively recognised over financial year 2018 to 2020 (FY18 to FY20).

Meanwhile, the first separable portion of Conservatory @ Melbourne (GDV RM669.9 million) is expected to commence settlement in December 2018, while full settlement is anticipated to be completed by 2019.

As of 9MFY18, UEMS has launched four projects worth RM740.2 million, namely Kondominium Kiara Kasih @ Segambut (RM300K, GDV RM215.7 million, take-up rate 71%); Serimbun @ Iskandar Puteri (RM630K to RM1.4 million, GDV RM139 million, take-up rate 84%); Residensi Astrea @ Mont’Kiara (from RM1.2 million, GDV RM323 million, take-up rate 51%); and Eugenia @ Serene Heights Bangi (from RM659K, GDV RM62.5 million, take-up rate 35%).

For 4QFY18, UEMS has lined up RM172.3 million worth of new launches, namely Serene Heights 1B2 @ Bangi, Selangor (landed residential, GDV RM52 million), Aspira Park Homes @ Gerbang Nusajaya, Johor (landed residential, GDV RM95.3 million); and Parcel i6 @ Taman Nusantara, Johor (commercial, GDV RM25 million). — AmInvestment Bank, Nov 29

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