22 August 2025
UEM Sunrise (UEMS MK)
Property | Real Estate
UEM Sunrise (UEMS MK) Focus On Implementing Business Strategy; BUY
Buy (Maintained)
Target Price (Return): MYR1.28 (+68%)
Price (Market Cap): MYR0.76 (USD909m)
ESG score: 2.9 (out of 4)
Avg Daily Turnover (MYR/USD): 5.27m/1.25m
Loong Kok Wen CFA
+603 2302 8116
loong.kok.wen@rhbgroup.com
- Maintain BUY and MYR1.28 TP, 68% upside with 1% FY25F yield. UEM Sunrise’s 2Q25 earnings fell below estimates, but its performance should pick up in 2H – driven by the disposal of some land and non-core assets. The company should be able to meet its full-year MYR1.05bn sales target, as 1H25 sales have already reached MYR649m. 2H25 should see sales contributions stream in from the Subiaco project in Perth as well as some newly launched projects in late 2Q25. Financially, the recent issuance of MYR500m sukuk at attractive rates should help ease financing costs ahead.
- 2Q25 results review. Revenue improved slightly QoQ, mainly underpinned by billings from The Minh, Residensi AVA, Aspira Hills and Aspira LakeHomes. Compared to its MYR133m land sale in 1Q25, 2Q25 land disposal revenue only amounted to MYR80m, mainly from the tranches of completed sales for Tapah land. The quarter also saw higher contributions from JV/associates. While net gearing stayed at 0.41x, finance costs came down by 14% QoQ. We highlight that it recently issued MYR500m in sukuk at 3.92% and 4.02% rates for 10 and 12-year tenors.
- 2Q25 sales eased slightly. 2Q25 property sales came up to MYR278.7m, vs MYR370.6m in 1Q25. Sales in 2Q25 were mainly generated from new launches in the past few quarters, as more recent launches were only released on 30 Jun ie the last day of 2Q25. Of the total sales of MYR649.3m for 1H25, the central and southern regions accounted for MYR424.4m and MYR224.9m. During the quarter, new landed homes were launched at Symphony Hills (GDV: MYR143m) and Aspira Hills Phase 2A and 3A (GDV: MYR270m). The 97% take-up rate for non-bumiputera lots in Aspira Hills within two days of launch continued to indicate that the Iskandar Malaysia property market remains favourable.
- Maintain MYR1.05bn sales target. Property sales in 2H25 will be mainly driven by the Subiaco project in Perth (GDV: MYR1.35bn), as well as launches in Serene Heights, Estuari ParkHomes and Estuari Greens (combined GDV: MYR375m). We believe UEMS will be able to meet its sales target by the year-end, as interest for the Subiaco project is rather strong. Meanwhile, management is currently in talks with a few parties to monetise the Collingwood project in Melbourne and some land parcels in Gerbang Nusajaya, including the 74 acres initially intended for data centre use.
- Forecasts. We maintain FY25-27F earnings. Unbilled sales remained resilient at MYR3.01bn, from MYR3.02bn as at 1Q25.
- Maintain TP. Our TP is based on a 40% discount to RNAV, with a 2% ESG discount imputed, given our ESG score of 2.9 for the company.
Share Performance (%)
| YTD | 1m | 3m | 6m | 12m | |
|---|---|---|---|---|---|
| Absolute | (29.6) | (1.3) | 3.4 | (21.3) | (24.0) |
| Relative | (26.6) | (5.8) | 0.3 | (21.4) | (21.4) |
| 52-wk Price low/high (MYR) | 0.63 – 1.17 | ||||
UEM Sunrise (UEMS MK) Price Close —Relative to FBM KLCI (RHS)
Graph data not available as images are excluded. This would typically show price trends and relative performance.
Source: Bloomberg
Forecasts and Valuation
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Total turnover (MYRm) | 1,339 | 1,340 | 1,410 | 1,508 | 1,642 |
| Recurring net profit (MYRm) | 76 | 104 | 111 | 120 | 130 |
| Recurring net profit growth (%) | 2.3 | 37.8 | 6.1 | 8.8 | 8.1 |
| Recurring EPS (MYR) | 0.01 | 0.02 | 0.02 | 0.02 | 0.03 |
| DPS (MYR) | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 |
| Recurring P/E (x) | 50.77 | 36.85 | 34.73 | 31.92 | 29.52 |
| P/B (x) | 0.56 | 0.56 | 0.55 | 0.55 | 0.54 |
| Dividend Yield (%) | 0.7 | 1.2 | 1.0 | 1.2 | 1.3 |
| Return on average equity (%) | 1.1 | 1.7 | 1.6 | 1.7 | 1.8 |
| Net debt to equity (%) | 44.4 | 39.6 | 37.2 | 38.0 | 38.6 |
Overall ESG Score: 2.9 (out of 4)
E Score: 2.7 (GOOD)
S Score: 3.3 (EXCELLENT)
G Score: 2.7 (GOOD)
Please refer to the ESG analysis on the next page
Source: Company data, RHB
Emissions And ESG
Trend analysis
In FY22, UEMS’ Scope 1 emissions increased to 4,475 tCO2e (FY21: 146 tCO2e), while its Scope 2 emissions dropped to 2,103tCO2e (FY21: 2,146 tCO2e).
| Emissions (tCO2e) | Dec-22 | Dec-23 | Dec-24 | Dec-25 |
|---|---|---|---|---|
| Scope 1 | 4,475 | na | na | na |
| Scope 2 | 2,103 | na | na | na |
| Scope 3 | 381 | na | na | na |
| Total emissions | 6,959 | na | na | na |
Source: Company data, RHB
Latest ESG-Related Developments
UEMS installed its first rooftop solar panel at The Beat, Kiara Bay, which generates 1,000kWh of clean energy.
Phase 2A of its Senadi Hills project also achieved a SHASSIC score of 98.60%.
ESG Unbundled
Overall ESG Score: 2.9 (out of 4)
Last Updated: 20 May 2025
E Score: 2.7 (GOOD)
UEMS is stringent on the appointment of vendors – this process is based on the latter’s work quality and track record. All UEMS projects are designed with sustainability features that promote green living. The company also practises waste management and the efficient utilisation of electricity and water.
S Score: 3.3 (EXCELLENT)
UEMS emphasises customer satisfaction and addresses defects effectively (89.8% of defects lodged were settled within 30 days, an improvement from 78.4% in 2018). The company is also involved in various charity events to help provide educational support and address social issues.
G Score: 2.7 (GOOD)
58% of UEMS’ board members are independent directors. UEMS has an in-house investor relations team and holds investor meetings regularly.
ESG Rating History
Graph data not available as images are excluded. This would typically show ESG rating trends over time.
For reference, ratings are 2.8 for Aug-23, Oct-23, Dec-23, Feb-24, Apr-24, Jun-24, Aug-24, Oct-24, Dec-24, Feb-25, Apr-25, Jun-25, Aug-25.
Source: RHB
Financial Exhibits
Valuation basis
40% discount to RNAV
Key drivers
- i. New property sales;
- ii. Substantial increase in foreign direct investments in Iskandar;
- iii. Ramp-up of mega infrastructure projects
Key risks
Unexpected, negative turn in market conditions
Company Profile
UEM Sunrise (previously known as UEM Land) is a company under Khazanah Nasional. This developer is undertaking projects in Nusajaya Iskandar.
Financial summary (MYRm)
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Recurring EPS | 0.01 | 0.02 | 0.02 | 0.02 | 0.03 |
| EPS | 0.01 | 0.02 | 0.02 | 0.02 | 0.03 |
| DPS | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 |
| BVPS | 1.35 | 1.36 | 1.37 | 1.39 | 1.40 |
| Return on average equity (%) | 1.1 | 1.7 | 1.6 | 1.7 | 1.8 |
| Return on average assets (%) | 0.6 | 0.9 | 0.9 | 0.9 | 1.0 |
Valuation metrics
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Recurring P/E (x) | 50.77 | 36.85 | 34.73 | 31.92 | 29.52 |
| P/B (x) | 0.56 | 0.56 | 0.55 | 0.55 | 0.54 |
| Dividend Yield (%) | 0.7 | 1.2 | 1.0 | 1.2 | 1.3 |
| EV/EBITDA (x) | 16.85 | 19.79 | 15.98 | 15.64 | 15.47 |
Income statement (MYRm)
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Total turnover | 1,339 | 1,340 | 1,410 | 1,508 | 1,642 |
| Gross profit | 474 | 418 | 492 | 518 | 524 |
| EBITDA | 324 | 270 | 326 | 340 | 350 |
| Depreciation and amortisation | (51) | (46) | (46) | (46) | (46) |
| Operating profit | 272 | 224 | 280 | 294 | 303 |
| Net interest | (157) | (149) | (141) | (141) | (137) |
| Pre-tax profit | 137 | 177 | 160 | 174 | 188 |
| Taxation | (53) | (61) | (48) | (52) | (56) |
| Reported net profit | 72 | 120 | 111 | 120 | 130 |
| Recurring net profit | 76 | 104 | 111 | 120 | 130 |
Cash flow (MYRm)
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Change in working capital | (149) | (210) | 65 | (134) | (178) |
| Cash flow from operations | 93 | (20) | 333 | 144 | 111 |
| Capex | 0 | (40) | (20) | (98) | (50) |
| Cash flow from investing activities | 52 | 334 | (20) | (98) | (50) |
| Dividends paid | 0 | (28) | (47) | (38) | (46) |
| Cash flow from financing activities | (163) | (285) | (105) | (103) | (113) |
| Cash at beginning of period | 1,020 | 1,002 | 990 | 1,147 | 1,050 |
| Net change in cash | (18) | 29 | 209 | (57) | (52) |
| Ending balance cash | 1,002 | 1,031 | 1,199 | 1,091 | 998 |
Balance sheet (MYRm)
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Total cash and equivalents | 1,092 | 1,265 | 1,422 | 1,325 | 1,252 |
| Tangible fixed assets | 5,164 | 5,159 | 5,132 | 5,184 | 5,188 |
| Intangible assets | 621 | 621 | 621 | 621 | 621 |
| Total investments | 2,892 | 2,518 | 2,518 | 2,518 | 2,518 |
| Total other assets | 665 | 588 | 609 | 585 | 562 |
| Total assets | 12,990 | 12,768 | 12,917 | 13,039 | 13,201 |
| Short-term debt | 1,016 | 1,044 | 1,044 | 1,044 | 1,044 |
| Total long-term debt | 3,164 | 2,989 | 3,001 | 2,990 | 2,993 |
| Total liabilities | 6,039 | 5,787 | 5,863 | 5,908 | 5,988 |
| Shareholders’ equity | 6,836 | 6,868 | 6,941 | 7,016 | 7,097 |
| Minority interests | 115 | 113 | 114 | 115 | 117 |
| Total equity | 6,951 | 6,981 | 7,055 | 7,131 | 7,213 |
| Total liabilities & equity | 12,990 | 12,768 | 12,917 | 13,039 | 13,201 |
Key metrics
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Revenue growth (%) | (9.1) | 0.1 | 5.2 | 7.0 | 8.9 |
| Recurring net profit growth (%) | 2.3 | 37.8 | 6.1 | 8.8 | 8.1 |
| Recurrent EPS growth (%) | 2.3 | 37.8 | 6.1 | 8.8 | 8.1 |
| Gross margin (%) | 35.4 | 31.2 | 34.9 | 34.3 | 31.9 |
| Recurring net profit margin (%) | 5.7 | 7.8 | 7.9 | 8.0 | 7.9 |
| Dividend payout ratio (%) | 39.3 | 39.3 | 34.3 | 37.8 | 37.9 |
Source: Company data, RHB
Results At a Glance
Figure 1: Quarterly results
| FYE Dec (MYRm) | 2Q24 | 1Q25 | 2Q25 | QoQ (%) | YoY (%) | 1H24 | 1H25 | YoY (%) | Comments |
|---|---|---|---|---|---|---|---|---|---|
| Turnover | 205.2 | 417.6 | 442.4 | 5.9 | 115.6 | 430.2 | 860.1 | 99.9 | |
| Property Development | |||||||||
| – Direct development | 159.4 | 253.2 | 334.0 | 31.9 | 109.5 | 300.0 | 587.2 | 95.7 | 2Q25 revenue was mainly driven by billings from Aspira Hills, Aspira LakeHomes, Residensi AVA and The Minh |
| – Developed land sales | 14.3 | 133.5 | 80.5 | (39.7) | 462.9 | 62.7 | 214.0 | n.m. | 1Q25 and 2Q25 land disposals were at Iskandar Puteri and Tapah |
| – Strategic land sales | 0.0 | 0.0 | 0.0 | n.m. | n.m. | 0.0 | 0.0 | n.m. | |
| Property Investment | 30.0 | 30.1 | 27.0 | (10.1) | (9.8) | 64.8 | 57.1 | (11.9) | |
| Others | 0.0 | 0.0 | 0.0 | n.m. | n.m. | 0.0 | 0.0 | n.m. | |
| EBIT | 56.9 | 55.5 | 58.8 | 5.9 | 3.4 | 88.8 | 114.3 | 28.7 | The lower margin in 4Q24 was largely attributed to higher staff costs and marketing expenses |
| EBIT margin (%) | 27.7 | 13.3 | 13.3 | 20.6 | 13.3 | ||||
| Net interest | (39.1) | (36.1) | (31.0) | (13.9) | (20.7) | (78.5) | (67.1) | (14.5) | |
| Pretax profit | 26.6 | 25.4 | 38.7 | 52.6 | 45.3 | 32.7 | 64.1 | 95.8 | 4Q24 PBT strengthened on a better performance from JV projects (Horizon Hills and Nusajaya TechPark) as well as lower financing costs |
| Pretax margin (%) | 13.0 | 6.1 | 8.7 | 7.6 | 7.4 | ||||
| Taxation | (9.2) | (5.9) | (12.8) | 115.6 | 39.2 | (10.3) | (18.7) | 81.7 | |
| Tax rate (%) | 34.5 | 23.4 | 33.1 | 31.5 | 29.2 | ||||
| Minority interest | 1.4 | 1.1 | (3.5) | n.m. | n.m. | 4.6 | (2.4) | n.m. | |
| Net profit | 18.8 | 20.5 | 22.4 | 9.4 | 18.9 | 27.0 | 42.9 | n.m. | |
| Core net profit | 18.8 | 20.5 | 22.4 | 9.4 | 18.9 | 27.0 | 42.9 | n.m. | Below expectations |
| EPS (sen) | 0.4 | 0.4 | 0.4 | n.m. | n.m. | 0.5 | 0.8 | n.m. | |
| Gross DPS (sen) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||
| NTA/share (MYR) | 1.4 | 1.4 | 1.4 | 1.4 | 1.4 |
Source: Company data, RHB
Figure 2: RNAV estimate
| Projects | Location | Remaining land (acres) | Remaining GDV (MYR m) | Stake | NPV @ 10% |
|---|---|---|---|---|---|
| Ongoing projects | |||||
| East Ledang
|
