UEM Sunrise Johor project gains momentum

Source: The Star

PETALING JAYA: UEM Sunrise Bhd is poised for growth as plans for its 3,000 acres in Iskandar Puteri, Johor gain momentum, supported by promising developments in the region's infrastructure landscape.

Following an engagement with the company, RHB Research said UEM Sunrise's management has shared ambitious plans for its vast land portfolio in Iskandar Puteri, indicating the execution of projects should be on track.

"Along with other proposed railway projects and possible locations for the Johor-Singapore special economic zone, various industrial and data centre players have approached UEM Sunrise for development opportunities," the research house noted, adding that pipeline news flow is expected to be strong.

According to the research firm, execution is key now.

"Management admitted that its share price has built in the market expectation of the company's project delivery going forward.

"However, it is confident that, with the plans in place - given the location and infrastructure of the land at Gerbang Nusajaya - UEM Sunrise will be able to attract the industries that it is targeting," it said.

Furthermore, with parent UEM Group Bhd and ITRAMAS Corp Sdn Bhd collaborating on a one gigawatt hybrid solar photovoltaic power plant, RHB Research said UEM Sunrise is actively seeking opportunities to engage supporting or auxiliary industries across the value chain.

"The company is also exploring potential joint ventures with local or foreign industrial players to develop the industrial component at Gerbang Nusajaya which accounts for 28.3% of the total gross development value of RM45bil," the research firm added.

The proposed Kuala Lumpur-Singapore High Speed Rail, Johor Baru Light Rail Transit, and potential upgrades to the Port of Tanjung Pelepas train line are expected to further enhance and complement the overall development plan.

The research house pointed out that it had met with 11 local institutional clients and received positive feedback regarding UEM Sunrise's prospects.

"Many clients were upbeat on the industrial development and infrastructure catalysts in Iskandar Malaysia.

"They generally agreed that UEM Sunrise had the most strategic landbank to capitalise on the spillover and burgeoning demand.

"While management's plan on industrial development is opportunitistic and should underpin the future growth of Gerbang Nusajaya, fund managers were generally hopeful that the plans can be executed promptly," it said.

RHB Research said the recent correction in the stock's share price following the Middle East geopolitical tensions is a good opportunity for investors.

Maintaining a "buy" call on the stock, RHB Research has an unchanged target price of RM1.60 per share.