KUALA LUMPUR: The listing of UOA Development Bhd (UOAD) on Bursa Malaysia will offer investors an opportunity to invest in a good fundamental stock, riding on the sustained sector upcycle.
RHB Research Institute Sdn Bhd, in a research note on Friday, June 3, said the listing would potentially make it one of the top five listed property developers in Malaysia.
"The major catalysts are continued expansion in profit margins as Bangsar South City, which makes up almost half of the total realisable net asset value, has gone past its start-up stage.
"Other catalysts are that key landbank and development are strategically positioned in the high-growth Klang Valley area and strong backing from the parent company, UOA Group," it said.
OSK Research in a note, said UOAD was also expected to benefit from synergies derived within the group.
"It will be the fourth largest property company listed on Bursa Malaysia in terms of market capitalisation of RM3.47 billion," it said.
TA Securities said UOAD has a good mix of portfolio of mid- to high-end residential commercial development in the Klang Valley, justifying its relatively high profit before tax margin of 50 per cent.
"According to the management, future earning contribution will skew towards residential development," it said.
It said UOAD's strong parentage with UOA Real Estate Investment Trust would be favourable to the group's long-term prospect.
"It allows to group to venture into the property market in Australia and Singapore by leveraging on the group's established brandname," it said.
Meanwhile, RHB research has put a fair value on the stock at RM3.45, OSK at RM3.57 and TA Research at RM3.48. — Bernama
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