KUALA LUMPUR: Property developer UEM Sunrise Bhd is likely to resume dividend payments from this year as it aims to turn around the company on the back of strong sales and progress billings as well as land sales.
UEM Sunrise has not been declaring dividend payouts for its shareholders since 2016 although it has a policy of 20% to 40% of its realised profit after tax and minority interests.
The company has also posted poor operating performance in the last two years.
Following Maybank IB Research’s recent meeting with UEM Sunrise, the research house said “potential surprises could come from the resumption of dividend payment from 2022 onwards.”
It noted that the company aims to divest RM300mil worth of non-core landbanks, of which some of these asset sales could materialise in the first half of this year.
“Management has been focusing on rectifying internal issues over the last one year and it has come out with several strategies including expediting property launches by creating new product pipelines, reviewing existing land use, improving cost structure and divesting some loss-making joint ventures as well as non-core assets,” it added.
As such, Maybank IB Research is maintaining a “hold” call on UEM Sunrise with a target price of 35 sen on the back of price-to-book value of 0.3 times.
It is keeping its earnings forecasts pending the release of its fourth quarter ended Dec 31, 2021 (Q4’21) results on Feb 23.
For 2022, Maybank IB Research noted that the company targets to achieve flat sales of RM1.5bil for this year driven by RM3.3bil worth of new launches in 2022.
In the second half of this year, the company is set to launch its project with a gross development value of A$250mil (RM751.9mil) in Collingwood, Australia.
It is applying for a planning permit for the project.
Despite the end of the Home Ownership Campaign in December last year, UEM Sunrise has received encouraging response for its Klang Valley properties due to its aggressive marketing campaigns.
The company has offered free legal fees for loans and sales and purchase agreement, waiver of stamp duty on loan agreement and memorandum of transfer for selected products.