CIMB Investment Bank Bhd (CIMB Securities) and Hong Leong Investment Bank Bhd (HLIB) have both maintained their HOLD calls on UEM Sunrise Bhd (UEMS), with target prices of RM0.86 and RM0.78 respectively, after the property developer posted first-half results that came in mixed against expectations.
CIMB Securities said UEMS’s 2Q25 core profit rose 9% quarter-on-quarter on a 6% revenue uplift, bringing 1H25 core earnings to 59% higher year-on-year, supported by stronger contributions from The MINH residential project and cost savings from completed developments such as Allevia Mont’ Kiara and Aspira Gardens 2.
The firm viewed the performance as in line, despite earnings making up just 39–40% of full-year estimates, citing potential gains from the disposal of Arcoris Retail and Carpark, four scheduled handovers in 2H25 and the proposed sale of 29 acres in East Ledang to a global data centre operator.
The research house highlighted RM1 billion in unbilled sales as of June, equivalent to 2.5 times UEMS’s FY24 property development revenue. It added that UEMS secured RM649 million in new sales during the first half, or 62% of its RM1.1 billion annual target, led by central region projects.
CIMB Securities said UEMS’s RM500 million sukuk issuance in June improved its net gearing to 41% from 43% in 1Q25, with proceeds earmarked to refinance higher-cost borrowings. It expects the group’s near-term performance to hinge on catalytic initiatives such as the Gerbang Jaya industrial masterplan and the unlocking of RM5.6 billion worth of Klang Valley landbank between 2026 and 2028.
HLIB, however, described the results as below expectations, with 1H25 core net profit of RM44.5 million accounting for just 31% of its forecast. It noted lower-than-expected sales and slower progress billings, leading to earnings forecast cuts of 16.5% for FY25, 3.6% for FY26 and 2.1% for FY27. While revenue rose 115.6% year-on-year in 2Q25 on stronger land sales, gross profit margin fell sharply to 25.2% from 35.3% a year ago, dragging on profitability.
The firm said unbilled sales stood at RM3.01 billion as at 2Q25 but would fall to RM2.13 billion after excluding the cancelled Collingwood en bloc sale in Melbourne, equivalent to 1.6 times FY24 revenue. Looking ahead, HLIB pointed to continued progress on The Minh, Residensi Zig and The Connaught One projects in the Klang Valley, with the East Ledang land sale expected to add RM37 million in gains in 4Q25.
Despite the divergence in assessment, both research houses held their Hold ratings, reflecting expectations that UEMS’s recovery will take time to gain traction, with valuations deemed fair at current levels.
The stock price as of 10.51 am is up 1.97% with RM0.775.
