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KUALA LUMPUR (April 29): UEM Sunrise Bhd (KL:UEMS) rose for a fourth straight session on Tuesday, driven by speculation over its undervaluation, potential takeover interest and re-rating prospects as it looks to unlock value from its Johor landbank.
UEM Sunrise reached an intraday high of 67 sen before settling at 66.5 sen by Tuesday's market close, with a total of 103.63 million shares changing hands. At its last price, the stock was up eight sen or 12.71%, bringing the company’s market capitalisation to RM3.37 billion.
UEM Sunrise has rallied nearly 32% since April 22, adding over RM809 million in market value.
Malacca Securities head of research Loui Low said buying interest in UEM Sunrise has centred on speculation that the stock could be a corporate target, citing its undervalued landbank in Johor.
“When there is a steep discount, the market will speculate on where it should move — at least towards book value per share of RM1.36,” he said.
He added that this creates both short-term trading opportunities driven by speculation as well as potential medium- to long-term upside if the stock gradually converges towards its book value.
Meanwhile, Hong Leong Investment Bank said in a note that the stock could see a potential re-rating as the new leadership’s recalibrated strategy to unlock value from its sizeable landbank begins to deliver tangible progress.
The research house upgraded the stock to “buy” from “hold”, with a higher target price of 90 sen, up from 56 sen previously — the most bullish among six analysts tracked by Bloomberg.
Currently, the 12-month consensus target price stands at 73 sen, with four “buy” calls and two “hold” calls, implying an upside of about 10%.
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