KUALA LUMPUR: Affin HWang Capital Research has reaffirmed its Buy call on UOA Development Bhd
as its earnings look set to sustain an uptrend over 2017-19E despite overall softness in the property market.
The research firm said UOA is focusing on launching property products within the affordable price category in Greater KL.
It said UOA trade at an attractive 2018E PER of 10.2x vs its peer average of 17.9x. Its other positive factors include a high next dividend yield, strong net cash position, high property development average gross margin and strong core earnings growth.
Affin Hwang Research lifted its real net asset value estimate by 3% to RM4.44 due to higher 74% share of UOA Business Park earnings after acquiring an additional 35% stake, earlier contribution from the Jalan Ipoh project in 2019E instead of 2020E and acceleration in sale of inventory.
THe research frim revised higher the core earnings by 3-6% in 2018-19E. "However, with dilution from new ordinary shares (101.8m) issued for its dividend-reinvestment plan, we lower our core EPS by 3% in 2017-18E, and leave that for 2019E unchanged (offset by the higher operating profit)."
THe research firm increased the counter's target price to RM3.11 from RM2.54.
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