KUALA LUMPUR: Public Investment Bank (PublicInvest) Research has revised UEM Sunrise Bhd's earnings estimate for financial year 2023 (FY23) downwards by 9.0 per cent after a disapointing third quarter (3Q) results.
"UEM Sunrise's nine months ended FY23 (9MFY23) net profit lags our and consensus expectations with its year-to-date profit of RM48.4 million only constituting 57 per cent and 54 per cent of respective full year estimates.
"As such, we adjust our earnings estimates downwards by 9.0 per cent (FY23), 9.0 per cent (FY24) and 8.0 per cent (FY25) after reviewing our billing assumptions," said the research firm in a note today.
UEM Sunrise's 3QFY23 net profit dropped to RM8.3 million primarily due to lower billings and land sales while revenue eased by 14 per cent quarter-over-quarter due lower land sales recognised during the quarter.
Revenue from land sales dropped in the current quarter to 10 per cent of sales as it only recognised RM31 million revenue from the sale of non-strategic land in Iskandar Puteri, Johor as opposed in 2QFY23 whereby RM69 million was recognised from land sales in Tapah, Perak.
Its unbilled sales remain steady at RM2.7 billion which will be recognised in the next 18 to 48 months.
To recap, UEM Sunrise lined up launches worth RM2.5 billion in FY23. Year-to-date, the company has unveiled The MINH (RM 979 million GDV), Mont Kiara in May and its first transit-oriented development, The Connaught One in June.
The higher-than-expected launches are mainly due to the Central region which saw some RM2.4 billion products unveiled so far, or 72 per cent of total launches.
"We maintain our 'underperform' call with an unchanged target price of 42sen," said PublicInvest.