Disappointing Debut for UOADEV

As all of you are aware,UOA Development Bhd, a Malaysia developer is making is debut today but the stock fell to RM 2.48 (3.42pm),  - below it’s IPO price. UOA’s institutional price has been fixed at RM2.60 and the final retail price at RM 2.52. The indicative retail price during prospectus issuance was RM2.90.

The stock however climb back at RM 2.59, above its retail price with 780,964 shares being traded, the most active stock. At the closing, UOADEV market capital stood at RM 3.097 billion.

The stock on Monday release it's first Quarter net profit of RM 130 million. 

RHB Research Institute had valued UOA at RM3.45, in line with its valuations on IJM Land Bhd.

“The implied price-to-earnings and price-to-book based on our RM3.45 indicative fair value are 18 times and 2.9 times for FY11, which are reasonable based on the sector’s overall valuations," the research house said.

According to a local dealer, "The sentiment is negative around property developers for now as many expect interest rates to go up in the near term,". But adds, the company has a good track record and a solid balance sheet with total assets exceeding MYR 1 billion and the IPO proceeds will bring down the debt to about MYR 35 million from close to MYR 350 million. The property developer raised MYR 1.1 billion from its IPO. "This will give it an opportunity to go for more land acquisitions for future earnings growth."