UOA Development Bhd has recorded stable earnings growth and strong sales momentum, which are supported by its ongoing projects and recurring income streams. RHB Investment Bank Bhd (RHB Research) has maintained a BUY call on the property developer with an unchanged target price of RM2.06, citing positive new property sales prospects and sustained earnings. UOA's 9MFY24 core net income of RM158.8 million was within expectations, representing 74% of full-year estimates.

RHB Research highlighted the surge in new property sales, which reached RM526.5 million in 3QFY24 compared to RM142 million in 2QFY24, driven largely by the Bamboo Hills Residence project. This brought total sales for 9MFY24 to RM790 million, with Bamboo Hills Residence contributing 58% and Aster Hill adding 30%. The bank expects sales momentum to continue, supported by the attractive pricing and strategic location of Bamboo Hills Residence, priced between RM400,000 and RM600,000.

Revenue for 3QFY24 grew 42.5% quarter-on-quarter, bolstered by higher revenue recognition from ongoing projects. However, core net income for the quarter fell 17% to RM49.7 million due to higher costs of sales and an increase in the tax rate to 39% from 36% in the previous quarter. On an annual basis, core net income rose 10.6%, bringing cumulative growth for 9MFY24 to 4.5%. Unbilled sales increased to RM524.6 million in 3QFY24 from RM368.7 million in 2QFY24, ensuring revenue visibility for the coming quarters.

RHB Research noted that UOA's recurring income from its hospitality assets and investment properties further supports its earnings resilience. The bank has maintained its earnings forecasts for FY24 to FY26, emphasising the company's medium-term growth prospects. A dividend yield of 5.4% adds to the attractiveness of UOA as an investment.

With its strong sales performance, strategic project portfolio and focus on sustaining revenue growth, UOA is well-poised to deliver consistent returns and value to its stakeholders.