UOADEV (5200) - Insider Asia’s Stock Of The Day: UOA Development
UOA (Fundamental: 3/3, Valuation: 1.2/3) is one of the largest listed property developers by market capitalisation in Malaysia. Its flagship project includes the 60-acre integrated city development at Bangsar South. The company also has pockets of land in Sentul, Jalan Ipoh, Old Klang Road and Kepong.
Earnings look likely to fall this year, the result of some project delays amidst uncertain outlook for the overall property market. For 9M2014, sales declined 16.7% to RM744.1 million while pre-tax profit was down 18.9% to RM331.1 million.
Nonetheless, UOA has a solid balance sheet with net cash of RM653.6 million or 46 sen per share. Dividends have been increasing steadily since its IPO in 2011, totalling 13 sen per share last year, translating into attractive net yield of 6.2%.
In short, whilst earnings may not excite in the short-term, shareholders should still earn higher-than-market average yields.
The company initially planned to launch six new developments in 2014 with estimated GDV of RM2.0 billion. However, the launch of projects in Jalan Ipoh, Taman Desa and Kepong with total GDV of RM0.9 billion is now delayed to 2015. As at end-Sept 2014, unbilled sales stood at RM1.8 billion.
In September, UOA launched the RM150 million Nexus, an integrated lifestyle centre at Bangsar South. With 300,000 sq ft of net lettable area, Nexus is currently 90% tenanted. Complementing Nexus is Connexion@Nexus, a banqueting facility covering 150,000 sq ft of floor space.
UOA is also looking to boost its recurring income stream. Investment properties have almost doubled y-o-y to RM775.6 million in 2013.
Valuations are decent — at trailing 12-month P/E of 9.5 times and 1.1 times book. Excluding cash, P/E stands at only 7.4 times. ROE was 16.0% in 2013, up slightly from 15.5% in 2012.
This article first appeared in The Edge Financial Daily, on February 6, 2015.
http://www.theedgemarkets.com
UOA (Fundamental: 3/3, Valuation: 1.2/3) is one of the largest listed property developers by market capitalisation in Malaysia. Its flagship project includes the 60-acre integrated city development at Bangsar South. The company also has pockets of land in Sentul, Jalan Ipoh, Old Klang Road and Kepong.
Earnings look likely to fall this year, the result of some project delays amidst uncertain outlook for the overall property market. For 9M2014, sales declined 16.7% to RM744.1 million while pre-tax profit was down 18.9% to RM331.1 million.
Nonetheless, UOA has a solid balance sheet with net cash of RM653.6 million or 46 sen per share. Dividends have been increasing steadily since its IPO in 2011, totalling 13 sen per share last year, translating into attractive net yield of 6.2%.
In short, whilst earnings may not excite in the short-term, shareholders should still earn higher-than-market average yields.
The company initially planned to launch six new developments in 2014 with estimated GDV of RM2.0 billion. However, the launch of projects in Jalan Ipoh, Taman Desa and Kepong with total GDV of RM0.9 billion is now delayed to 2015. As at end-Sept 2014, unbilled sales stood at RM1.8 billion.
In September, UOA launched the RM150 million Nexus, an integrated lifestyle centre at Bangsar South. With 300,000 sq ft of net lettable area, Nexus is currently 90% tenanted. Complementing Nexus is Connexion@Nexus, a banqueting facility covering 150,000 sq ft of floor space.
UOA is also looking to boost its recurring income stream. Investment properties have almost doubled y-o-y to RM775.6 million in 2013.
Valuations are decent — at trailing 12-month P/E of 9.5 times and 1.1 times book. Excluding cash, P/E stands at only 7.4 times. ROE was 16.0% in 2013, up slightly from 15.5% in 2012.
This article first appeared in The Edge Financial Daily, on February 6, 2015.
http://www.theedgemarkets.com
