United Overseas Australia (UOA) - Undervalued developer with strong balance sheet Last done price : 0.235 cents Market Cap : $ 212 million
Background United Overseas Australia Ltd (“UOA”) is a property developer based predominantly in Malaysia’s Kuala Lumpur (KL) that focuses on middle to high-end residential and commercial property development and investment properties in KL. Its residential property developments include fully-fitted villas and apartments, and are typically aimed at attracting middle to high income purchasers. Its commercial property developments comprise mainly office buildings with retail space, for sale and lease. UOA is listed in both SGX and ASX. The group holds 46% equity in UOA REIT.
HY 2009 results ended 30 Jun 09 (in A$):
Sales Revenue : $110,285,000 Cost of Sales : ($45,571,000) Gross Profit Margin : $64,741,000 Other revenue : $85,678,000 Net Profit : $83,483,000 (After minority interest and tax)
Gross Profit Margin : more than 50%!!! EPS (cents per share) : 9.47 (Full year EPS expected to be more than 12) P/E Ratio : Less than 3
Dividend : Proposed Interim dividend of 0.5 A cent per share Anticipate final dividend to be more than 1.5 A cent per share, making expected total dividend to be 2 A cent per share or more, translating to a dividend yield of approx. 10% (after converting to SGD)
A strong balance sheet with low gearing • Cash reserve of A$83 million • Low gearing
Summary:
-> In a financially strong position for future investment and acquisition opportunities -> Upcoming investment properties give potential of more monetization of assets through UOA REIT. -> Huge reserve in land bank provides more possible upside -> Significant discount to NTA -> Fundamentally undervalued as compared to peers listed in Singapore (its P/E of less than 3 is way below the industry average of 6x - 7x)
Conclusion: Potential multi-bagger! Can easily double its current price once investors get to know more of this gem!
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