"Corresponding sales of RM807m is on-track at 61% of our FY18 target of RM1.33b as one of their major launches is earmarked for 2H18. Key sales drivers were SouthLink, United Point and Sentul Point. No dividend, as expected," it said.
On a quarter-on-quarter basis, UOA Development's core net profit leapt 266% to RM118mil due to a 77% jump in revenue on improved billings and recognition of sale of an office tower in Horizon, Bangsar South, as well as the low-base effect of 1Q18 where MFRS 15 impact and recognition of projects at initial stages affected margins severely.
Year-on-year, 1H18 core net profit dropped 28% on the back of a 23% decilne in revenue as there were less project completions.
Kenanga said the group is looking to launch The Park Resident II @ Bangsar South for the remainder fo the year.
"This year, we only expect Southbank Ph II and Danau Kota to be completed. Works on Bandar Tun Razak @ Cheras and South Point @ Bangsar South are expected to commence this year and earmarked for recurring income purposes.
"The group has also acquired 16.1 ac in Sepang recently for its assisted living project pipeline (refer overleaf). This year’s earnings are likely to be volatile as it will be dependent on inventory driven sales, which is tough to predict."
The research house reiterated market perform on the counter with a target price of RM2.30.
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