KUALA LUMPUR: Maybank Investment Bank Research has upgraded UEM Sunrise Bhd to a tactical "buy" following investors' recent selldown of the share.

       The research house noted that the company's stock currently trades at an undemanding 0.3x/0.2x PBV/PRNAV as it has weakened about 11% since early July.

       From an earnings angle, the research house has doubts that the company will turnaround in 2021 due to slower work progress from the imposition of the National Recovery Plan Phase 1 since June 1.

       "We expect the upcoming 2Q21-3Q21 results to be weak as the imposition of NRP1 has affected most of the company’s construction works (and

       hence, earnings recognition).

       "While earnings will likely pick up strongly in 4Q21 with the reopening of economy, UEMS may not be able to recoup the losses and turnaround in 2021, we reckon," it said.

       Maybank IB lowered its FY21 earnings forecast by 114% and raised its FY22 estimate by 2% to factor in slower progress billings due to the National Recovery Plan and EMCO in Kuala Lumpur-Selangor.

       UEM Sunrise's management remains confident of hitting its FY21 sales target of RM1.2bil with the launch of its new project in Taman Pertama, Cheras in 4Q21 that targets first-time home buyers.

       It also expects sales to pick up once the lockdown is lifted in view of the pent-up demand and low interest rate environment as well as aggressive market incentives.

       "Potential surprise could come from the disposal of non core landbank located in Johor," said Maybank IB.