KUALA LUMPUR : Maybank IB Research has retained 'hold' rating for UEM Sunrise Bhd as the company faces a challenge to meet its sales target this year.
Amid weak buying sentiment and stiff competition on the domesticv front, UEM's launching of its property project in Melbourne is also set to be delayed, it said.
“Sales of UEM's affordable housing projects have been satisfactory but high end highrise projects such as Estuari and Almas remains slow. To entice potential buyers, UEM had launched the Signature Selection campaign between April and May which successfully raked in RM145mil in sales,” said Maybank IB which has a target price of RM1.09 for the stock.
According to the research house, UEM is keeping its 2016 sales target of RM1.5bil for the year despite weak sales during the first quarter (1Q16). The company has lined out RM760mil worth of new launches in the second half of this year to push sales.
“However, we think meeting the sales target is a challenge after considering the current weak sentiment and the delay in launching the St. Kilda project in Australia. Our new sales forecast for the year is RM1.37, having revised it down by 14%,” it said.
Meanwhile, Maybank IB said that the management's approach remains focused on affordable housing.
Upcoming launches in Iskandar Puteri will be more towards affordable landed residential and industrial properties to reduce direct competition with Chinese developers in the high-rise property segment, it said.