Uem Sunrise Berhad

Titan Trading Notes For Monday [24/2/2025]:

KLCI had a decent rebound back towards the 1591 points region with an overall mixed market sentiment as we still had almost 450 counters closing red for the day. Daily trading volume dipped slightly below the 3 billion mark, whish isn't a good sign.

Main stocks that showed strong buying momentum would be the likes of MYEG, PCHEM, UEMS, GAMUDA, SUNLOGY, IJM, AIMFLEX, DIALOG, MRDIY, TANCO, MNHLDG, and CBHB. All of which were able to sustain their rallies throughout the day on the top volumes list despite the mixed market sentiment.

$UEMS / 5148 (UEM SUNRISE BERHAD) since retracing all the way back towards its RM 0.885+ main support levels from last Thursday, was able to emerge as one of the star performers on Friday, breaking out all the way towards the RM 0.98+ regions with huge volume and buying momentum here.

So far looking not too bad here and if able to breakout from its RM 1+ major resistance levels on the daily chart, could trend back up towards its RM 1.10+ main downtrend resistance levels soon in the coming weeks.

Will be monitoring UEMS closely.

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD) on the other hand since announcing solid earnings of almost RM 520 million in PAT in its latest QR, was able to rebound strong from its RM 3.65+ support levels all the way back towards the RM 4.10+ regions with huge volume.

For those that have not noticed, PCHEM has actually been dropping over the past year here since its RM 7 regions, heading all the way back towards the RM 3.64 regions on Thursday. Definitely still on a downtrend here but if able to sustain this rebound, could rebound further back towards the RM 4.50+ regions soon.

Will be monitoring PCHEM closely.

$CBHB / 0339 (CBH ENGINEERING HOLDING BERHAD) since announcing solid earnings of slightly over RM 10 million in PAT, was able to sustain its buying momentum and closed back green around the RM 0.335 regions on Friday despite the mixed market sentiment.

For now, it's looking quite strong here and as long as able to sustain above its RM 0.325+ immediate support, could trend back up towards its RM 0.35 - RM 0.36 major resistance levels in the coming weeks here.

Will be monitoring CBHB closely.

🇲🇾🇸🇬JS-SEZ: Unlocking High Value Growth And Fostering Win-Win Cross-Border Prosperity

• The much anticipated joint agreement to establish JS-SEZ has been formalised by both leaders of MY and SG following the 11th Malaysia-Singapore Leader’s Retreat today.

• Touted as the first-ever cross-country economic zone, JS-SEZ underscores both Malaysia and Singapore’s commitment to unlock high value growth and fostering win-win cross border prosperity

• The JS-SEZ rides on Singapore’s offering as a robust MNC business hub, and Johor to complement with competitive cost of doing business – with abundant supply of land, labour costs and favourable tax regime.

• Envisioned to be a successful industrialisation zone, JS-SEZ is expected to be >4x larger than Singapore and nearly twice the size of China’s Shenzhen. Meanwhile, 16 economic sectors have been proposed to be part of the zone which includes the new priority sectors i.e. Aerospace, EE&E, Chemical, Medical devices and Pharmaceuticals.

• This will be carried out at 9 flagship zones spanning JB City Centre, Iskandar Puteri, Tg. Pelepas - Tg Bin, Pasir Gudang, Senai – Skudai, Sedenak with 3 new flagship zones i.e. Forest City, PIPC and Desaru. Property summary to ensue with more details on these areas.

• In expediting approvals and streamlining processes, Invest Malaysia Facilitation Centre – Johor, will be establish to act as an one-stop centre in facilitating investments.

✅ Key Measures Proposed

• Pro-business policies and incentives including special tax breaks, grants and streamlined regulations.

• Special corporate tax rates will be offered to companies undertaking new investments in high-growth and high-value-added activities within JSSEZ. A special personal income tax rate will be announced at a later date. It is understood that the MOF is looking to revamp the tax structure to be more outcome-based, closely tied to the investments companies bring to the table.

• Foreign investor-friendly policies including robust IP laws and allowing 100% foreign equity in selected service sectors such as healthcare, social services, tourism, transport, business, and IT.

• Reduced friction from cross-border travel and trade via automated immigration lanes and paperless clearance for goods

• Enhanced immigration passes with Malaysia’s existing visas to be enhanced similar to the DE Rantau Nomad Pass

• Support from the MY Gov for the development of the JS-SEZ via a new infrastructure fund to support power, water, roads, electricity, gas and to some extent, land (It was mentioned that land falls under the jurisdiction of the state govt)

• Funding support from the SG Gov to facilitate the expansion of SG companies into the JS-SEZ and potential twinning of MNC operations in Singapore and the SEZ

• Targeting 50 high-value projects and 20,000 high-skill jobs created over the next 5 years

• The first wave will target global companies managing geopolitical risks, advanced E&E industries, data centers, Pengerang-related projects, tourism, and green electricity initiatives.

• A streamlined pathway will be available for investors to access green electricity. Instead of waiting for quotas, they can work directly with Genco TNB to secure green electricity through the CRESS program.

🚰 Impact/Beneficiaries

• Utilities: Corporate Renewable Energy Supply Scheme (CRESS) should benefit all solar players (Pekat, Malakoff, Solarvest, Samaiden), YTLP, TNB

• O&G: Dialog, beneficiary not only via its position in Pengerang, also plus its position in Tanjung Langsat

• Construction: JS-SEZ and updates on the proposed KL-SG HSR shall benefit mid-large cap construction stocks like Suncon, Gamuda, IJM, YTL

• RTS/ART: Public transport improvements in Johor are not part of the JSSEZ initiative and remain pending a decision from the federal government. We gather that negotiations for the Johor LRT/ART are ongoing, with no final decision yet. Developers involved with RTS currently are Suncon, IJM, Gadang, Econbhd. So further rail network developments may benefit these names with track records.

• Property: Developers with landbank under the JS-SEZ flagship zones are UEMS, IOIPG, Mah Sing, SP Setia, ECW, Lagenda, Sunway Bhd (refer to table).

• Technology: While details remain limited, the potential lies in attracting IC designers, OSAT providers, and EMS players. This is expected to follow the establishment of facilities by MNCs, paving the way for a robust technology ecosystem.

$UEMS / 5148 (UEM SUNRISE BERHAD)
$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)
$SPSETIA / 8664 (S P SETIA BERHAD)

Titan Trading Notes For Monday [6/1/2025]:

Although KLCI retraced and closed red around the 1629 points region, the overall market sentiment was still a pretty good one. Daily trading volume was also able to surge back towards the 3.69 billion mark, which is a pretty good start for the year.

Main stocks that showed strong buying momentum would be the likes of MYEG, DNEX, WCT, UEMS, SIMEPROP, EKOVEST, MRCB, WINSTAR, YTL, IWCITY, GENETEC, CARLORINO, SCGBHD, MAHSING, PWRWELL, and VELESTO. All of which were able to sustain their rallies throughout the day on the top volumes list.

$DNEX / 4456 (DAGANG NEXCHANGE BERHAD) had an interesting breakout towards the RM 0.43+ regions with huge volume on Friday, making it one of the star performers last week. This came after it broke out and consolidated around its RM 0.375 support levels over the past month.

So far looking quite ripe for a new uptrend rally here if able to keep up. As long as able to sustain above its RM 0.41+ immediate support level, could continue to trend back up towards the RM 0.45 - RM 0.48+ major resistance levels soon in the coming weeks.

Will be monitoring DNEX closely here as something big could be brewing soon.

$UEMS / 5148 (UEM SUNRISE BERHAD) on the other hand since consolidating over the past 5-6 months without much volume and action, was able to have a huge breakout towards the RM 1.17+ regions during last Friday here out of nowhere.

So far looking quite strong here as it just broke out from its RM 1.10+ main downtrend resistance on the daily chart. If able to sustain the buying momentum, could spark a new uptrend rally back towards the RM 1.28+ major resistance levels soon in the coming weeks.

Will be monitoring UEMS closely here.

$SIMEPROP / 5288 (SIME DARBY PROPERTY BERHAD) although took a hit and retraced back towards the RM 1.63+ support levels last week, was able to hold well and broke out towards the RM 1.75 regions with huge volume and buying momentum on Friday.

This is a pretty strong bullish signal here. If able to keep this up, could trend back up towards its RM 1.78 all time high levels soon for an uptrend continuation pattern in the coming week.

Will be monitoring SIMEPROP closely.

$UEMS / 5148 (UEM SUNRISE BERHAD)
Research by RHB

$UEMS / 5148 (UEM SUNRISE BERHAD)
Research by MAYBANK

$UEMS / 5148 (UEM SUNRISE BERHAD)
Research by CGSI

$UEMS / 5148 (UEM SUNRISE BERHAD)
Research by HLIB

$UEMS / 5148 (UEM SUNRISE BERHAD)
Research by PBIV

🚀 BUDGET 2025 MALAYSIA THEME STOCKS 🚀



💥 Pre-Rally Alert 💥: Stocks to watch in anticipation of Budget 2025 on 18 Oct 2024:

1️⃣ Infrastructure 🏗
Transportation Projects → MRT 3, Penang LRT 🚆
Water Infrastructure → Pipe replacements, filtration, flood control 💧
Key Stocks: SUNCON, GAMUDA, IJM, RESINTC, ENGTEX, MCEMENT

2️⃣ Sarawak 🌴
More Allocations → Infrastructure and energy projects in Sarawak 🌱
Renewable Energy → Focus on East Malaysia's green projects ♻️
Key Stocks: IBRACO, PANSAR, CMSB, AFFIN

3️⃣ Johor 🏙
Tax Incentives → Johor-Singapore Special Economic Zone and Special Financial Zone 🏭
First-Time Homebuyer Discounts 🏡
Key Stocks: UEMS, IOIPG, KSL, CRESNDO

4️⃣ Cybersecurity 🔒
Cybersecurity initiatives → More funding and subsidies for cybersecurity measures.🖥
Key Stocks: LGMS, CLOUDPT, INFOTEC

5️⃣ Food 🍗
Subsidy Removals → potential removal of egg and sugar price subsidies and ceiling prices 🍳
Tax Hike → Sugar-sweetened beverage taxes 🥤
Key Stocks: TEOSENG, PWF, MSM

6️⃣ Palm Oil 🌴
Windfall Tax Cut → Likely increase in threshold 📉
Key Stocks: SOP, TAANN, JTIASA

7️⃣ Electronic Invoices 🧾
Phased Rollout → eInvoice for businesses 💼
Key Stocks: ADB, PANDA, IFCAMSC

8️⃣ Renewable Energy 🌞
Growth in Renewables → LSS5, Floating solar, EV charging 🌱
Key Stocks: SLVEST, SAMAIDEN, SCGBHD

9️⃣ Tech & Manufacturing 💻
Incentives for High-End Manufacturing → Semiconductor industry growth 🔧
Key Stocks: KGB, AME, INARI, MPI

$IBRACO / 5084 (IBRACO BERHAD) $SCGBHD / 0225 (SOUTHERN CABLE GROUP BERHAD) $JTIASA / 4383 (JAYA TIASA HOLDINGS BHD) $TEOSENG / 7252 (TEO SENG CAPITAL BERHAD) $UEMS / 5148 (UEM SUNRISE BERHAD)

CIMB Securities Research recently visited two major developments in Iskandar Puteri, Johor: the 2,000-acre integrated township, Sunway City Iskandar Puteri (SCIP) by Sunway Bhd – the largest in the area – and Puteri Harbour, a prime waterfront development by UEM Sunrise Bhd (UEM Sunrise), which also has an international ferry terminal.

KUALA LUMPUR: Five China-based companies have expressed interest in becoming off-takers and establishing local manufacturing facilities within the UEM Sunrise Berhad Renewable Energy (RE) Industrial Park in Gerbang Nusajaya, Iskandar Puteri, Johor.

$UEMS / 5148 (UEM SUNRISE BERHAD)

$UEMS / 5148 (UEM SUNRISE BERHAD)
Research by RHB
Buy - TP RM1.60

"Ramping Up New Launches In 2H24; Maintain BUY"

MaintainBUYandMYR1.60TP,61%upside.UEMSunrise’s2Q24earnings missed expectations. We expect earnings to come in stronger in 2H as the company ramps up launches, and more non-core land and asset sales may be recognised in 2H24. 1H24 property sales reached MYR502m, on track to meet full-year target of MYR1bn. We continue to like UEMS for its strategic landbank in Iskandar Malaysia, which may significantly capture the opportunities that the Johor-Singapore Special Economic Zone may bring about.

Analyst:
Loong Kok Wen CFA
loong.kok.wen@rhbgroup.com

$UEMS / 5148 (UEM SUNRISE BERHAD)
Research by Public
Underperform - TP RM0.70

"Sales Target On Track"

UEM Sunrise (UEMS) registered 2QFY24 net profit of RM17.2m ( -38.4m YoY, >100% QoQ) which as expected, improved sequentially as margins improved. Albeit Group 1HFY24 net profit only constituted about 35% and 27% of our and consensus full-year estimates, we deem it as in line as we expect earnings to be stronger in the subsequent quarters as gains from land sales are expected to be recognized, with higher progress billings also seen. Pre-sales achieved in 1HY24 amounted to RM502.4m (from RM232.6m in 1QFY24), or about half of its FY24 sales target of RM1bn. Unbilled sales remained steady at RM2.7bn (from RM2.6bn in 1QFY24), ensuring revenue visibility until FY27. All told, we make no changes to our earnings estimates. Valuations are still rich in our view and hence, we maintain our Underperform call and fair value of 70sen, pegged at c.0.5x to book value.

Analyst:
Tan Siang Hing
tan.sianghing@publicinvestbank.com.my

$UEMS / 5148 (UEM SUNRISE BERHAD)
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

$UEMS / 5148 (UEM SUNRISE BERHAD)
Research by CGS
Reduce - TP RM0.75

"2Q24 dragged down by lower new sales"

■ 1H24 core net profit of RM23.9m missed expectations, at only 27% of our and 24% of Bloomberg consensus full-year forecasts.
■ The group recorded property sales of RM502.4m in 1H24, and is on course to meet its RM1.0bn sales target for FY24.
■ Reiterate Reduce, with an unchanged TP of RM0.75 based on 0.55x FY24F P/BV.

Analyst:
Lucas TAN
lucas.tan@cgsi.com
CHONG Tjen-San, CFA
tjen-san.chong@cgsi.com

$SPSETIA / 8664 (S P SETIA BERHAD) $SIMEPROP / 5288 (SIME DARBY PROPERTY BERHAD) $UEMS / 5148 (UEM SUNRISE BERHAD) $IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD) $KSL / 5038 (KSL HOLDINGS BERHAD)

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD) $UEMS / 5148 (UEM SUNRISE BERHAD) $SUNWAY / 5211 (SUNWAY BERHAD) $SPSETIA / 8664 (S P SETIA BERHAD) $KSL / 5038 (KSL HOLDINGS BERHAD)

$RHBBANK / 1066 (RHB BANK BERHAD)
$AIRPORT / 5014 (MALAYSIA AIRPORTS HOLDINGS BERHAD)
$UEMS / 5148 (UEM SUNRISE BERHAD)

$UEMS / 5148 (UEM SUNRISE BERHAD)

PETALING JAYA: Leveraging on last year’s annual property transaction historical high, UEM Sunrise Bhd (UEMS) is optimistic about ending financial year 2024 (FY24) on a good note.

OTHERSUEM SUNRISE BERHAD ("UEMS" OR THE "COMPANY")
ADDITIONAL TAX ASSESSMENT RECEIVED BY BANDAR NUSAJAYA DEVELOPMENT SDN BHD ("BND"), A WHOLLY OWNED SUBSIDIARY OF UEM LAND BERHAD, WHICH IN TURN IS A WHOLLY OWNED SUBSIDIARY OF UEMS

KUALA LUMPUR: UEM Sunrise Bhd has appointed Emily Teh as its new chief marketing officer (CMO), effective April 15, 2024.

TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : NON RELATED PARTY TRANSACTIONSUEM SUNRISE BERHAD ("UEMS" OR "COMPANY")
PROPOSED ARRANGEMENT FOR THE 40% EQUITY STAKE HELD BY UEM LAND BERHAD ("UEM LAND"), A WHOLLY OWNED SUBSIDIARY OF UEMS IN AURA MUHIBAH SDN BHD ("AMSB") TO KLK LAND SDN BHD ("KLKL"), A WHOLLY OWNED SUBSIDIARY OF KUALA LUMPUR KEPONG BERHAD ("KLK") FOR THE JOINT DEVELOPMENT OF LANDS MEASURING 2,500 ACRES IN MUKIM SENAI, KULAI, JOHOR

TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : NON RELATED PARTY TRANSACTIONSUEM SUNRISE BERHAD ("UEM SUNRISE" OR THE "COMPANY")
PROPOSED BUILD TO RENT ("BTR") DEVELOPMENT ON A PROPERTY MEASURING 5,390 SQUARE METRES OR 1.33 ACRES AT 21-53 HODDLE STREET, COLLINGWOOD VIC 3066 IN MELBOURNE, AUSTRALIA VIA A COLLABORATION WITH GREYSTAR REAL ESTATE PARTNERS BY WAY OF A CONTRACT OF SALE FOR THE PROPERTY AND A FUND THROUGH AGREEMENT FOR THE DEVELOPMENT OF THE PROPERTY WITH AN ESTIMATED TOTAL TRANSACTION VALUE OF AUD277.3 MILLION

$UEMS / 5148 (UEM SUNRISE BERHAD)
Research by Maybank
Sell – TP RM1.00

“Selling stake in Kulai land to KLK"

We are neutral on UEMS’ latest sale of its remaining 40% stake in AMSB (which owns 2,500 acres of land in Kulai) to KLK. The sale proceeds will be used to lower UEMS’ debt. We maintain our earnings forecasts. Our TP is unchanged at MYR1.00, based on 0.75x FY25E P/B. Reiterate SELL. For exposure in the property space, we prefer SPSB MK (BUY, CP: MYR1.42, TP: MYR1.66) and ECW MK (BUY, CP: MYR1.65, TP: MYR1.83).

Analyst:
Wong Wei Sum, CFA
weisum@maybank-ib.com

$UEMS / 5148 (UEM SUNRISE BERHAD)
Research by HLIB
Sell – TP RM0.72

“Disposal of stake in Kulai lands to KLK"

UEMS announced the sale of its entire 40% equity stake in Aura Muhibah Sdn Bhd (AMSB) to KLK for RM386.2m, leading to AMSB ceasing to be an associate of UEMS post-disposal. The disposal involves 2.5k acres of Kulai plantation lands under AMSB. The selling price of RM8.87 psf is lower compared to recent transactions, reflecting a discount of 26.1% compared to IOIPG's sale to EcoWorld. The estimated net gain from this disposal is RM32m, to be recognized in 2HFY24, with proceeds intended to reduce debt – expected to lower UEMS net gearing to 40.5% from 46% in 1Q24. We maintain a SELL recommendation with a slightly lower TP of RM0.72 based on 65% discount to the revised estimated RNAV of RM2.06.

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

KUALA LUMPUR: UEM Sunrise Bhd’s subsidiary UEM Land Bhd, plans to exit a joint venture company with KL Kepong Bhd (KLK) which has the rights to develop 1011 hectare (ha) parcels of land in Kulai, Johor for RM386.2 million.

© New Straits Times Press (M) Bhd

TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : NON RELATED PARTY TRANSACTIONSUEM SUNRISE BERHAD ("UEMS" OR "COMPANY")
PROPOSED ARRANGEMENT FOR THE 40% EQUITY STAKE HELD BY UEM LAND BERHAD ("UEM LAND"), A WHOLLY OWNED SUBSIDIARY OF UEMS IN AURA MUHIBAH SDN BHD ("AMSB") TO KLK LAND SDN BHD ("KLKL"), A WHOLLY-OWNED SUBSIDIARY OF KUALA LUMPUR KEPONG BERHAD ("KLK") FOR THE JOINT DEVELOPMENT OF LANDS MEASURING 2,500 ACRES IN MUKIM SENAI, KULAI, JOHOR

$UEMS / 5148 (UEM SUNRISE BERHAD)
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