Malaysia’s EPF Board increases UOA Development stake

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The Employees Provident Fund Board of Malaysia acquired an additional 64,900 shares in Malaysia-listed UOA Development, bringing its total holding to 216.39 million shares, or a 10.18 percent stake, according to a filing to Bursa Malaysia Wednesday.

On 9 July, the day the shares were acquired, UOA Development ended at 1.64 ringgit, well off a closing high of 1.91 ringgit touched in June.

On 6 July, EPF Board had acquired 60,000 shares, a separate filing to the exchange said.

UOA Development is the construction and development division of United Overseas Australia (UOA) Group. It engages in property development of residential and commercial properties, and is also in the hospitality segment and holds investment properties to generate rental income and/or capital appreciation.

Malaysian investment bank Kenanga earlier this month said that even if the country recovers from the Covid-19 pandemic, Malaysia’s house price index (HPI) likely wouldn’t amid a long-standing oversupply issue. Kenanga said there were around 154,723 overhanging and unsold under-construction units among residential and serviced apartments in the country.

Kenanga said it preferred developers which have better online integration, allowing properties to be purchased virtually; it scored UOA Development poorly on that measure. It rated the stock at Market Perform with a 1.76 ringgit target price.

Earlier this year, UOA Development said it would diversify into caregiving services via a joint venture with home-care service provider Care Concierge to develop and manage health facilities, such as nursing homes, dental clinics and independent-living facilities.

For the first quarter, the company reported in May that its net profit tumbled to 36.09 million ringgit from 124.22 million ringgit a year earlier, while revenue fell to 140.17 million ringgit from 375.27 million ringgit a year earlier.

For 2020, UOA Development its revenue dropped to 844.60 million ringgit, from 1.10 billion ringgit a year earlier as the Covid-19 pandemic caused a contraction in the property market. Most of the new properties sold were in the residential segment, while the hospitality division’s income took a hit due to the pandemic.

Malaysia’s EPF, established in 1951, covers 14.59 million members, with 7.63 million of them active contributors as of end-2019. The annual contribution to the fund from employees and employers was 75.93 billion ringgit as of end-2019, with a dividend payout of 47.64 billion ringgit in 2020.