PETALING JAYA: UEM Sunrise Bhd
(UEMS) is aiming to sharply lift profitability, with its management guiding for a tripling of return-on-equity (ROE) over the next five years as it accelerates development and unlocks land value.
The target comes off a low base, with ROE estimated at about 1% in financial year ended Dec 31, 2025, highlighting the scale of the turnaround being pursued.
Central to this effort is a combination of faster project rollouts, expansion of recurring income assets and active monetisation of its Johor landbank.
This is highlighted by both RHB Research and CIMB Research, which recently met the property developer’s senior management.
Citing UEMS new CEO Shaharul Farez Hassan, RHB Research said: “He emphasised his focus on tripling the company’s ROE within five years through accelerating property development projects as well as commercialisation of residential and commercial landbank at Gerbang Nusajaya.”
The brokerage noted that about 1,000 acres have been earmarked for monetisation, potentially fetching around RM4bil, while the group may also raise its dividend payout from the current 60% to contain equity expansion.
Echoing this, CIMB Research said the group reiterated its target of tripling its ROE by 2030 from about 1% in 2025.
“To achieve this target, UEMS has unveiled a three-pronged strategy: (i) accelerate property development activities with a refreshed team, (ii) grow its property investment assets to RM1.3bil–RM1.5bil from RM800mil as of 2025; and (iii) commercialise its landbank (through land divestments or joint developments),” the research house noted.
The landbank strategy is expected to work in tandem with new industrial initiatives.
According to RHB Research, UEMS is an attractive takeover or privatisation target, with rising land values in Iskandar Malaysia driven by catalysts such as the upcoming rapid transit system link, the Johor-Singapore Special Economic Zone, an influx of investments, as well as active landbank acquisitions in Johor.
“Due to the lack of earnings quality and convincing execution of catalytic projects in the past, UEMS’ share price has de-rated since last year.
“While fundamentals are weak, we view UEMS differently given its strategic landbank at Gerbang Nusajaya,” it explained.
“Based on UEMS’ current market capitalisation of RM2.6bil and remaining landbank of 4,516.7 acres in Johor, the implied valuation for the landbank is only at RM13 per sq ft,” it added.
Meanwhile, CIMB Research highlighted an improving financial footing, noting that UEMS’ leaner balance sheet, with net gearing of 37% in 2025, places the company on firmer ground to acquire property investment assets that are net asset value-accretive.
RHB Research maintained its “buy” rating on UEMS. However, it cut its target price for the counter to 86 sen from RM1.09 previously, in part to reflect the current market headwinds arising from the Middle East conflict.
CIMB Research also reiterated its “buy” call on UEMS, with an unchanged target price of 86 sen, citing potential for a re-rating as execution strengthens and ROE targets are progressively delivered.
