Period 1Q12
Actual vs. Expectations
We consider 1Q12 net
profit of RM40.9m broadly in line with expectations, although it only makes up
14% each of the street’s FY12E net profit of RM299.0m and our RM287.7m. We
expect subsequent quarters to be stronger due to timing of new launches and
billings.
Dividends Proposed FY11 NDPS of 10.0 sen (6.4% yield) and
the dividend reinvestment scheme (DRS) have been approved in the AGM yesterday.
The payment date has yet to be set but is scheduled over the next three
months.
Key Results Highlights
YoY, 1Q12 net profit
was down by 69% because of 1Q11’s fair value gains of RM92.3m, however, core
earnings did grow 8% on higher billings.
QoQ, 1Q12 core
earnings of RM40.9m was up 15% YoY due to pretax margins (ex fair value) improving
4.9ppt to 42.2%. This is because 4Q11 admin/general expenses registered
front-loaded provisions on rental guarantees.
1Q12 saw sterling
sales of RM443m, or c.50% of our FY12E sales target of RM0.9b, mainly driven by
Le Yuen Residences, Vertical Suites@Bangsar South City and One@Bukit Ceylon.
However, we do not expect 1Q12 to be repeated in 2Q12 as major new launches
(Glenmarie/Subang Land GDV: RM1.0b; Kiara IV GDV: RM0.5b) will only likely take
place in 3Q12.
Outlook Subsequent quarters will be stronger as we expect
1) recognition of en bloc sale to DKLS Industries for RM93.8m and 2) billings
from advance or near completion projects (e.g. Binjai 8, Setapak Green,
Camellia@Bangsar South City).
Change to Forecasts
Maintain FY12-13E net
profit of RM287.7mRM362.3m. No change to sales targets but expect better
quarters ahead. Unbilled sales of RM0.7b provide a 1-year visibility.
Rating MAINTAIN OUTPERFORM
Expect UOA’s projects
to buck the bearish trend while the anticipation of its continuous strong dividend
payouts will lend strength to the stock. FY12-13E net dividend yields will be
attractive at 8.2%-7.7%, while FY12E will also enjoy FY11 dividends of 10.0
sen.
Valuation No
changes to our TP of RM1.65, based on a 52% discount* to FD SoP RNAV of RM3.46.
Risks Unable
to meet sales targets. Fall-through of en bloc sale. Sector risks, including
negative policies
Source: Kenanga
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