PETALING JAYA: Although the tie-up with Singapore’s GuocoLand Ltd may yield longer-term benefits for UEM Sunrise Bhd
, CIMB Securities has lowered the stock’s target price (TP) to 86 sen per share from 98 sen previously.
The research house said: “The reduced TP takes into account a moderation in our margin assumptions for some of UEM Sunrise’s projects in Iskandar Puteri as competition intensifies in the vicinity.
“Although the tie-up with GuocoLand could potentially yield longer-term benefits, these value-unlocking moves will take time to filter through amid renewed uncertainties over fresh US tariffs and their impact on large-scale business and investment decisions.
“Key rerating catalysts include the crystallisation of the memorandum of understanding (MoU) with GuocoLand.
“The key risk factor will be a full-blown trade war, which may undermine initial progress made with the Johor-Singapore Special Economic Zone (JS-SEZ),” the research house added.
As for the tie-up with GuocoLand, the research house said the MoU is timely as it paved the way for the company to jointly develop selected plots of the group’s freehold land in Iskandar Puteri with GuocoLand, marking the first privately driven partnership between Malaysia and Singapore under the JS-SEZ.
The collaboration spanned residential products including premium homes, industrial parks (ready-to-build and managed services), commercial, retail, education, wellness, and hospitality.
The addressable market include Malaysians working in Singapore, retirees, Singaporeans and expatriates from neighbouring Asian countries.
“Having ownership of the identified land parcels, we expect UEM Sunrise to gain access to the development rights for future development proposals mooted in Iskandar Puteri under the MoU’s framework,” it pointed out.
“By extension, this will help accelerate the maturity of UEM Sunrise’s Johor land bank, combining the group’s master-planning capabilities with GuocoLand’s proven expertise in executing property development and investment projects,” the research house added.
