The still subdued consumer sentiment against a backdrop of rising cost of living and elevated household debts is holding consumers back from committing themselves to the purchase of big ticket items like a house.
KUALA LUMPUR: : AmInvestment Research remains cautious on the property sector due to the generally still elevated home prices; the low loan-to-value (LTV) offered by banks; and house buyers' inability to qualify for a home mortgage due to their already high debt service ratios (DSR).
It said on Wednesday, in addition, the still subdued consumer sentiment against a backdrop of rising cost of living and elevated household debts is holding consumers back from committing themselves to the purchase of big ticket items like a house.
“However, we do see a bright spot in the affordable segment,” it said.
AmInvest Research maintains its hold call on UEM Sunrise
(UEMS) with a revised fair value of RM1 (from RM1.25) based on a 40% discount to its realised net asset value (RNAV).
It cut FY18 earnings by 1 .1% while increasing FY19 by 7.7% after imputing new information and assumptions into its model.
“We expect UEMS to register net earnings of RM243.4mil, RM271.3mil and RM233.2mil for FY18-20 respectively,” it said.
UEMS has numerous ongoing key projects, namely Serene Heights @ Bangi (landed residential, GDV RM3.1bil), Solaris Parq @ Dutamas, KL (high-rise residential, GDV RM2.9bil), Estuari, Puteri Harbour (mixed development, GDV RM6.5bil), East Ledang @ Iskandar Puteri (landed residential, GDV RM4.1bil) and Almas, Puteri Harbour @ Iskandar Puteri (mixed development, GDV RM1.9bil).
To recap, in April 2018, UEMS acquired 72.7 acres of land in Kepong from the Kuala Lumpur City Hall (DBKL) for RM416.4mil via a 50:50 JV with Mega Legacy Equity Sdn Bhd. The land is adjacent to the Kepong Metropolitan Park.
The JV plans to develop a mixed residential and commercial development with an estimated GDV of RM15bil over a 15-year period.
In 1HFY18, UEMS has lined up RM356.8mil of new launches (high-rise and landed residential), with key selling points being: (1) affordability for Kondominium Kiara Kasih units in Segambut @ RM300,000 – GDV RM218mil); and (2) “nature themed” units in Serimbum, Iskandar Puteri @ RM630,000-RM1.4mil – GDV RM139mil.
“Meanwhile, the unbilled sales of RM4.8bil together with a slew of new launches in FY18-FY19 will boost its revenue in the near term.
“UEMS has a total landbank of 12,926 acres, with a remaining GDV of RM109.1bil where RM78.1bil are new projects while the balance RM31.0bil are yet-to-be-launched ongoing projects.
“These are mainly located at the southern and central regions, providing earnings visibility and driving the company’s growth well into the next decade,” said AmInvest.
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