Maybank Downgrades UEMS as RM4bn AME Venture’s Meaningful Earnings Await 2029
Octopaul AI ·
Maybank Investment Bank analyst Wong Wei Sum downgraded UEM Sunrise to “Hold” from “Buy”, cutting her target price to RM0.50 from RM0.66, implying 4.2% upside. Following its industrial-park partnership with AME Elite Consortium, she believes the benefits of AME’s expertise are partly offset by a later development start and UEM Sunrise sharing half of the project’s future earnings.
The 50:50 joint venture will develop a 402-acre industrial park in Gerbang Nusajaya, Johor, with approximately RM4 billion in gross development value. UEM Sunrise will sell the land to the venture for RM972.1 million, generating an estimated RM47.4 million net disposal gain. However, the first phase is now expected to commence in late 2027 or early 2028, compared with the previously guided early-2027 start.
Looking ahead, Wong expects meaningful earnings contributions from the industrial park only from 2029 onwards. She left earnings forecasts unchanged pending clarity on the disposal gain’s recognition timing. Her lower valuation reflects a preference for stronger core property-development earnings over one-off asset sales. Disposal proceeds should support debt repayment and working capital, although UEM Sunrise must also fund its share of the joint venture.
As of 9:55 a.m. on November 2, UEM Sunrise’s share price rose 5.3% to RM0.50.
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