CIMB Research keeps UOA Devt top pick in property sector (5200)

KUALA LUMPUR: CIMB Equities Research
is maintaining UOA Dev as it top pick in the property sector for its
attractive valuations. It is also keeping its target price of RM2.18.
“The
stock is trading at FY12-14 P/Es of 6-8 times and offers 6%-7% dividend
yield, the highest in the sector,” it said on Friday after the company
announced a strong set of financial results in the second quarter ended
June 30, 2012.
CIMB Research said UOA's interims were in line with its expectations but beat consensus.
The
first half net profit made up 49% of our full-year forecast and 53% of
consensus and it expected H2 profits to be slightly stronger.
“It
locked in RM900mil new sales in H1, exceeding the RM848mil sales for
the whole of 2011. We retain our forecasts, Trading Buy call and target
basis of 20% discount to RNAV,” it said.
CIMB Research said one of the reasons for the strong new sales is UOA Dev's ability to adapt to changing market conditions.
“Even
in the office space market where there is a glut, Vertical is selling
very well. Also, the group has spent the last two years accumulating
landbank in the periphery of KL for the development of medium-cost
residential properties priced around RM500,000, which are in demand.
"This
lays the foundations for strong new sales over the next few years. We
believe that the strong sales are sustainable this year and next,” said
the research house.