• Maintain NEUTRAL and MYR1.86 TP, 0% downside. UOA Development’s 4Q23 results were within expectations. FY23 property sales achieved MYR827.3m (vs MYR638m in FY22) as sales were boosted by the redevelopment of an old sales gallery. Looking ahead, both Duo Tower and Bamboo Hills Residence are expected to be the main property sales driver this year. We expect UOAD to achieve similar sales for 2024 vs last year.

• 4Q23 results. 4Q23 revenue continued to be contributed by ongoing projects such as Laurel Residence and Aster Hill, as well as the sale of completed units from United Point Residence and Sentul Point. EBIT during the quarter was lifted by a few one-off items including MYR39.4m fair value gain arising from Bamboo Hills and the sale of an old sales gallery, as well as reversal of impairment losses on its non-financial asset (related to Komune Living in Bangsar South). The MYR2.5m inventories written-down are largely coming from the shop lots in Sentul Point. A 10 sen final single-tier dividend was declared. Taking into account the 20 sen special dividend, total DPS amounted to 30 sen in FY23, compared with 10 sen in FY22.

• Sales in 4Q23 boosted by a strategic redevelopment. Property sales achieved MYR365.4m vs MYR158.9m in 3Q23. Property sales during the quarter were largely boosted by the disposal of the company’s previous sales gallery at Bangsar South for a redevelopment into a low-rise medical suite worth MYR237m. Projects that contributed to property sales during the year include Aster Hill (MYR204.1m), Laurel Residence (MYR163.7m) and The Goodwood Residence (MYR146.8m). Take-up rate for Aster Hill is now 36% (from 33% in 3Q23) for Block A and 18% for Block B (8% in 3Q23). Meanwhile, Laurel Residence is 70% sold, from 64% in 3Q23.

• Only two new projects for 2024. UOAD only plans to roll out two projects this year – Duo Tower (MYR1.3bn GDV but only one-third of the space will be released for sale) and Bamboo Hills Residence (GDV: MYR1.3bn). We understand that Duo Tower will have its preview this week. Meanwhile, the highly-anticipated Bamboo Hills Residence will have its preview in March and be officially launched in April pending the advertising permit and developer’s license (APDL). The APDL is slightly delayed as UOAD made some revisions to its design earlier.

• Forecast. We raise our FY24F-25F earnings by 1-10% to reflect the earnings contribution from the medical suites. Unbilled sales fell to MYR308.4m vs MYR322.8m as at 3Q23.

• Valuations. Our TP is based on 40% discount to RNAV and 2% ESG discount.

Source: RHB Research - 28 Feb 2024