14 June 2014

RHB Research keeps ‘buy’ call on UEM Sunrise

  14 June 2014

By BUSINESS TIMES
RHB Research has maintained its “buy” call on UEM Sunrise Bhd with a fair value of RM2.73, and the high-speed rail project being a possible key to turn around the weak sentiment on Iskandar Malaysia.
This came after the RM3.7 billion integrated technology park in Nusajaya, dubbed Nusajaya Tech Park, a 60:40 joint-venture project between Ascendas Pte Ltd and UEM Sunrise, had its groundbreaking ceremony last Thursday.
The project is the first economic cluster in the 1,618ha Gerbang Nusajaya.
RHB Research said as the park is currently in its start-up phase and that more material earnings will only be seen from 2016.
“We reiterate that the high-speed rail project could be the key to turning around sentiment on Iskandar in late 2014,” the research house said in its note.
RHB Research said the Nusajaya Tech Park, located five to 10 minutes away from the Second Link Expressway, has seen initial success and will be the key economic driver to trigger a population expansion and help absorb the oversupply of residential properties in Iskandar.
The industrial park, which is expected to attract a 200,000-strong working population, will be able to nurture the economic development at Gerbang Nusajaya.
The project has received a 40 per cent pre-commitment out of the 21 units of factories marketed. Sanwa Group, YCH Group and Telekom Malaysia Bhd unit VADS Bhd are among the companies that will set up their base there.
“Sales and purchase agreements will likely to be signed in August when the building plans are approved,” RHB Research said.

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