STRATEGIC ACQUISITIONS: Photo shows an artist’s impression of (from left) UOA’s Le Yuan Residence, Desa Eight and Setapak Green. Moving forward, UOA intends to capitalise on its strong balance sheet to further acquire strategic development lands in Kuala Lumpur.
KUCHING: As one of the leading property players in Malaysia, UOA Development Bhd’s (UOA) announcement of its financial results for the second quarter ended June 30, 2012 (2QFY12) portrayed a positive outlook for the remaining half of the year, buoyed by its strong balance sheet and encouraging sales.
To note, the group in a press release announced a revenue totalling RM197.46 million for the second quarter of 2012 which was a 14 per cent increase compared with the corresponding quarter in 2011.
Additionally, UOA’s profit after tax rose considerably by 75 per cent at RM104.97 million for the quarter under review in comparison with the corresponding quarter.
According to the property analyst at the research arm of MIDF Investment Bank Bhd (MIDF Research), the group’s sales remained encouraging with property sales in 2QFY12 improving by five per cent to RM467 million.
Meanwhile, UOA’s year-to-date sales of RM900 million surpassed its full year sales of FY11.
“UOA will continue to do well with the strategy it’s currently employing,” the MIDF Research analyst outlined over the telephone.
“This strategy includes properties in the right areas – focusing on medium end residential market in established suburbs and commercial development at strategic locations.”
The strong sales, he noted, were buoyed by good take-up of the company’s new projects, namely The Vertical Office Suites in Bangsar South and Le Yuan Residence in Happy Garden, as well as higher sales of all existing on-going development projects.
Take up rate for some of the newer launches in 1HFY12 had been encouraging which includes Lee Yuan Residences (from 42 per cent in 4Q11 to 70 per cent), Vertical office (67 per cent), Camelia service apartment (63 per cent in 4Q11 to 73 per cent) and One @ Bukit Ceylon (70 per cent in 4Q11 to 89 per cent).
Unbilled sales rose from RM723 million in 1QFY12 to RM814 million in 2QFY11.
Moving forward, UOA intended to capitalise on its strong balance sheet to further acquire strategic development lands in Kuala Lumpur.
The MIDF Research property analyst affirmed that UOA had a strong pipeline for 2HFY12, lining up RM3.1 billion worth of launches for the period.
About 40 per cent of the launches were residential development, 48 per cent mix development and the balance are office development.
“Apart from the new launches, UOA had RM374 million worth of inventories available for sales from the Horizon, Menara UOA Bangsar, Park Residences, Villa Pines, Plaza Menjalara and Kepong Business Park,” affirmed the analyst.
“We are raising our forecast for FY12 and FY13 by 10 per cent and 18 per cent respectively given the sustainable property sales momentum.”
Thus, the research firm pegged a target price of RM2.07 per share for UOA by rolling over its valuation to FY13, arriving at our target price by ascribing PER of 8X against FY13 EPS of 26sen.
The price earnings ratio of eight times is 20 per cent discount against forward price earnings of eight of the larger cap developers.