RHB Research maintains market perform on UEM Land, FV RM2.18

KUALA LUMPUR: RHB Research is keeping its fair value for UEM Land at RM2.18 and maintaining it as a market perform.
It said on Tuesday UEM Land will develop 678.7 acres of land in Desaru on a 51:49 JV basis with Desaru Development Corp (a unit under Khazanah). The land is disposed of at a market value of RM485.3mil.
The land cost of RM16 per sq foot is reasonable given that land title and infra will be provided by Desaru Development.
The project is worth RM5.4bil over a period of 20 years, and positioned as an exclusive high-end residential resort development.
“We
are neutral. Longer-term prospect is likely to be positive, as the
project will cater for the O&G workers at Pengerang. However, we
would prefer UEM Land concentrate on its existing projects at Nusajaya
and Puteri Harbour, as these are the ones that are contributing
immediate earnings.
“No change in earnings. Fair value is kept at RM2.18. Maintain Market Perform,” it said.