[%FAOV%]
Research by HLIB
Sell - TP RM0.72

"Not striking the iron when it’s hot"

UEMS reported 2Q24 core PATAMI of RM16.9m (+108.8% QoQ; -31.4% YoY), which brought 1H24’s sum to RM25m (-32.6% YoY). The results were below our/consensus expectations, making up 16.1%/25.7% of full year forecast. The negative deviation was due to lower-than-expected sales and site progress. We
lower our FY24/25/26 forecasts by -13.8%/-0.7%/-0.7% mainly to reflect slower sales and billings in FY24. Maintain SELL with an unchanged TP of RM0.72 based on 65% discount to our estimated RNAV of RM2.06. While the Johor property sector is improving, the group has yet to demonstrate meaningful
progress in ramping up its developments in the region. Consequently, we believe the company is not fully capitalizing on the growth opportunities in Johor, leading to our reservation in ascribing a higher valuation to the stock.

Analyst:
Tan Kai Shuen, CFA
[%EQWH%]

$KLSE-UEMS
Research by HLIB
Sell - TP RM0.72

"Not striking the iron when it’s hot"

UEMS reported 2Q24 core PATAMI of RM16.9m (+108.8% QoQ; -31.4% YoY), which brought 1H24’s sum to RM25m (-32.6% YoY). The results were below our/consensus expectations, making up 16.1%/25.7% of full year forecast. The negative deviation was due to lower-than-expected sales and site progress. We
lower our FY24/25/26 forecasts by -13.8%/-0.7%/-0.7% mainly to reflect slower sales and billings in FY24. Maintain SELL with an unchanged TP of RM0.72 based on 65% discount to our estimated RNAV of RM2.06. While the Johor property sector is improving, the group has yet to demonstrate meaningful
progress in ramping up its developments in the region. Consequently, we believe the company is not fully capitalizing on the growth opportunities in Johor, leading to our reservation in ascribing a higher valuation to the stock.

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