UEM Land Holdings Bhd's acquisition of Sunrise Bhd will further enhance the success of its flagship Nusajaya township, HwangDBS Vickers Research said.

In its Company Focus Wednesday , the research house said the recent acquisition would allow UEM Land to leverage on Sunrise's strong brandname and track record in high-end high-density residential and commercial developments.

"Sunrise will provide UEM Land with near-term earnings from more mature Klang Valley area to complement greenfield Nusajaya's long-term growth potential, and diversify its earnings base," it said.

It said UEM Land was currently trading at a 25 per cent discount to its realisable net asset value (RNAV) compared with big-capitalised developers' average of 18 per cent.

This discount should narrow down with improved earnings visibility and lower execution risk following the Sunrise acquisition and the company's possible inclusion in the KLCI FBM-30, it said.

"We applied a conservative 10 per cent discount to RNAV to derive a RM3.45 target price for UEM Land compared with five per cent premium to RNAV for sector leader SP Setia Bhd," HwangDBS said. -- Bernama