OUTPERFORM ↔
Target Price: RM2.30 ↔
UOA Development (UOA) held its first result briefing for 1H12, which was fairly well attended. Total GDV has increased to RM15b from its IPO guidance of RM13b from new projects like Jalan Ipoh and Kepong. This excludes the potential 15-20% upside to Bangsar South’s remaining GDV of RM5b which still reflects ASP at IPO. The group is targeting RM3.1-3.2b new launches (maintain ‘affordable segments’) over the next 12-18 months in highly sought-after locations. Cash proceeds from sale of its en bloc offices of RM298m means UOA can comfortably undertake Bangsar South’s next growth phase, whilst ensuring it meets our expected FY12-13E net yields of 6.9%-6.2%, which is higher than the sizeable M-REITs (4.3%-4.5%). No changes to TP to RM2.30 based on 33%* discount to our FD SoP RNAV of RM3.43. Reiterate OUTPERFORM given investors’ needs for defensive.
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