[%HjKq%]
Research by HLIB
Sell - TP RM0.73

"Capturing a slice of the DC pie via land sale"

UEMS announced on 11 June that it is selling its East Ledang land in Johor measuring 28.9 acres for RM144.9m for the development of a data centre (DC). This transaction translates to a selling price of RM115psf, which is in line with recent land sale transaction in Johor to DCs that ranges from RM75-138psf. We are positive on this development as UEMS was able to capitalize on the current DC boom and monetize its landbank at a very attractive price. We increase our FY24 forecast by +33.8% to factor in this land sale. Maintain SELL with an unchanged TP of RM0.73 based on 65% discount to our estimated RNAV of RM2.09. While the current development is positive, valuation of the stock remains rich, trading at FY24/25/26f PER of 49.7/64.1/49.3x.

Analyst:
Tan Kai Shuen, CFA
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$KLSE-UEMS
Research by HLIB
Sell - TP RM0.73

"Capturing a slice of the DC pie via land sale"

UEMS announced on 11 June that it is selling its East Ledang land in Johor measuring 28.9 acres for RM144.9m for the development of a data centre (DC). This transaction translates to a selling price of RM115psf, which is in line with recent land sale transaction in Johor to DCs that ranges from RM75-138psf. We are positive on this development as UEMS was able to capitalize on the current DC boom and monetize its landbank at a very attractive price. We increase our FY24 forecast by +33.8% to factor in this land sale. Maintain SELL with an unchanged TP of RM0.73 based on 65% discount to our estimated RNAV of RM2.09. While the current development is positive, valuation of the stock remains rich, trading at FY24/25/26f PER of 49.7/64.1/49.3x.

Analyst:
Tan Kai Shuen, CFA
kstan@hlib.hongleong.com.my