Kuala Lumpur, 22 August 2025 – Property developer UEM Sunrise Bhd (UEMS) remains under cautious watch despite stronger first-half results, with both CIMB Investment Bank and Hong Leong Investment Bank (HLIB) maintaining their Hold calls on the stock. CIMB set a target price of RM0.86, while HLIB pegged it at RM0.78, as analysts weighed mixed signals from the company’s performance.
For the second quarter of 2025, UEMS reported a 9 per cent rise in core profit quarter-on-quarter, supported by a 6 per cent revenue uplift. First-half core earnings were 59 per cent higher year-on-year, largely driven by contributions from The MINH residential project and cost savings from completed developments, including Allevia Mont’ Kiara and Aspira Gardens 2. CIMB described the results as broadly in line, even though earnings accounted for only 39–40 per cent of full-year forecasts. The research house pointed to potential gains from the disposal of Arcoris Retail and Carpark, upcoming project handovers, and the proposed 29-acre land sale in East Ledang to a global data centre operator.
Unbilled sales stood at RM1 billion as of June, equivalent to 2.5 times FY24 property revenue, with RM649 million in new sales secured in the first half. CIMB also noted improved balance sheet strength following a RM500 million sukuk issuance in June, which reduced net gearing to 41 per cent. Future performance, it said, would hinge on large-scale initiatives such as the Gerbang Jaya industrial masterplan and the unlocking of RM5.6 billion worth of Klang Valley landbank between 2026 and 2028.
HLIB, however, viewed the results as weaker than expected, with first-half core net profit of RM44.5 million making up just 31 per cent of its FY25 forecast. It cited lower sales and slower progress billings, prompting earnings forecast cuts of 16.5 per cent for FY25, 3.6 per cent for FY26, and 2.1 per cent for FY27. Although revenue surged 115.6 per cent year-on-year in 2Q25 due to stronger land sales, gross margins slipped to 25.2 per cent from 35.3 per cent a year earlier, weighing on profitability. HLIB also noted that unbilled sales of RM3.01 billion would shrink to RM2.13 billion after excluding the cancelled Collingwood en bloc sale in Melbourne.
Looking ahead, analysts expect contributions from Klang Valley projects including The Minh, Residensi Zig and The Connaught One, while the East Ledang land deal is projected to deliver RM37 million in gains in 4Q25.
Despite differing assessments, both CIMB and HLIB agree that UEMS is still in the early stages of recovery. The counter’s valuation is seen as fair at current levels, with its turnaround dependent on successful project execution and asset monetisation.
As of 10.51 a.m., UEMS shares rose 1.97 per cent to RM0.775.
