RHBInvest Research
Tuesday, March 8, 2011
Top Story: UEM Land – Too big to be ignored
Market Perform (New Coverage)
New Coverage
Key investment case: i) The largest property stock by market cap and landbank, and will be the only pure property stock if included into the FBM KLCI 30 Index; (ii) The inclusion of Sunrise will reduce execution risk with RCPS to ensure alignment of interest of Datuk Tong with downside being capped; (iii) The entrance of Temasek via the iconic wellness township projects a strong repricing catalyst for land and property values in Nusajaya; (iv) Continued diversification of landbank either via outright acquisition of land parcels or property companies to minimise concentration risk; and (v) Quality of earnings to improve.
Fair value of RM2.80, at its RNAV. News flow on the development of Singapore land parcels will be the key re-rating catalyst, which will potentially raise RNAV/share to RM3.19.
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