KUALA LUMPUR (July 1): Hong Leong Investment Bank Research (HLIB) has retained a “buy” call and its target price of RM4.04 on UEM Sunrise Bhd after its chief revealed in The Edge’s City & Country pullout that the property developer plans for a RM4 billion worth of property launches this year.

In the interview, UEM Sunrise chief executive officer Datuk Wan Abdullah Wan Ibrahim said of the RM4 billion in gross development value, RM3 billion will come from Nusajaya, Johor, with the remainder from its central and international developments.

In a note today, HLIB analyst Sean Lim said the research house is “cautiously optimistic” of UEM Sunrise’s plans to launch RM3 billion worth of projects in Nusajaya due to a robust demand in the region.

“We believe UEM Sunrise has a safety net in the sense that it is in a position to control the supply/demand situation in Nusajaya, which should help prevent the dreaded property overhand situation. Moreover, we expect bulk of the launches to be in the high-value Puteri Harbour, which continues to enjoy strong demand from foreigners and wealthy Malaysians,” Lim commented in the note.

He also said the research house expects the property developer to acquire both township and niche high-rise land banks, given that it now has strong execution capabilities for both segments of the property market.

“(UEM Sunrise) management’s tone suggests some major deals could be struck soon, before the end of the year,” Lim said.

He added HLIB expects land acquisitions to increase UEM Sunrise’s net gearing level, which currently stands at 0.16 times.

“(The net gearing level) implies RM4.1 billion of gearing headroom before it hits 0.5 times,” said Lim in the note.

UEM Sunrise shares ceded four sen to trade at RM3.08 at 2:57 pm. The counter had a trading volume of 1.096 million.