UOADEV: Property Developer Sees Strong Sales Momentum, Earnings Forecast Raised
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A leading property developer has demonstrated robust financial performance, prompting an upward revision of its earnings forecasts by an investment bank. This positive momentum is primarily attributed to exceptional sales from its strategically located projects, particularly the highly anticipated Aethera Residences in Johor Bahru and the successful price adjustments for Bamboo Hills units in the Klang Valley.
Robust Performance Driven by Strategic Projects
Aethera Residences, with an estimated Gross Development Value (GDV) of MYR800 million, has seen overwhelming demand during its pre-launch phase. Non-bumiputera units were nearly fully taken up, a success credited to its prime location, an attractive 25% early-bird rebate, direct connectivity via a covered walkway to the Rapid Transit System (RTS) station, and the developer’s strong brand reputation. The official launch in 1Q26 is expected to see a reduction in the rebate. Similarly, the developer successfully raised the selling price for the remaining non-bumiputera units at Bamboo Hills to approximately MYR850psf, up from MYR650psf at initial launch, following strong sales in 2Q25-3Q25.
Positive Outlook and Higher Forecasts
Looking ahead, Aethera Residences is poised to be the primary sales driver in FY26, with contributions to earnings anticipated from FY27. Despite an expected deceleration in Bamboo Hills’ unit sales after achieving a 62% take-up rate, the robust performance of Aethera is set to compensate. Consequently, the investment bank has revised its earnings forecasts for FY25, FY26, and FY27 upwards by 15%, 14%, and 13% respectively. Dividend per share (DPS) forecasts have also been increased to 13 sen for FY25-26, aiming for an almost 100% payout ratio, which is well-supported by the company’s substantial net cash reserves of MYR1.7 billion. The potential acquisition of additional land parcels in Johor Bahru for future developments also presents an optimistic growth avenue.
Valuation and Recommendation
The investment bank maintains a BUY rating on the developer, with a revised target price of MYR2.10, up from MYR2.08. This new target price reflects an 11% potential upside and is based on an updated RNAV estimate, applying an unchanged 30% discount to RNAV and a 2% ESG discount.
