YTL Land & Development target price RM3.30

YTL Land & Development Bhd (YTLL) has the largest tract of prime landnear KLCC and Mont' Kiara. Measuring 294 acres, it is a self-contained enclavethat is divided into two unique but distinctive areas named Sentul West andSentul East. In its masterplan, YTLL plans to build 4,000 luxury condominiums inSentul West and 3,000 condominiums in Sentul East.Point: We believe YTLL's Sentul development is the up and coming address inKuala Lumpur. Recent positive measures by the government have already seenproperty prices rise in Mont' Kiara and KLCC. Sentul, which is located smack inbetween Mont' Kiara and KLCC, should generate more interest and priceappreciation in time.Relevance: We are initiating coverage on YLLL with a Buy recommendation,ascribing a RNAV-based TP of RM3.30. YTLL's focus on high-end properties willbenefit from recent positive measures by the government. We believe the stage isset for YTLL to leverage on and be more aggressive project launches, especiallyits Sentul projects.An innovative homebuilder. YTLL is known for revitalizing neglected butstrategically located land into attractive and thriving communities. YTLL'sstrengths lie in its innovation and ability to accentuate the naturalattractions of site by conserving and retaining the existing natural environmentand terrain. YTLL's projects, such as Lake Edge in Puchong and Lake Fields werebuilt around disused mining pools.Right timing, right segment. YTLL is mainly involved in mid-high end commercialand residential properties. This segment should see an increase in demand fromforeign and local investors after the government lifted RPGT recently and easedforeign ownership rules.Up and coming address. We believe YTLL's Sentul development, which was unveiledin 2002, has all the ingredients to be transformed into one of the sought-afteraddresses in KL. Since 2002, YTLL has completed a 35-acre park in Sentul West,improved accessibility to within 15 minutes drive from Mont' Kiara and KLCC, theKL Performing Arts Center and a Koi Pond center. We expect the development,which is centered around a park modeled after New York's Central Park andLondon's Hyde Park, will receive strong interest especially from foreigners.Target price of RM3.30. We believe YTLL deserves to be valued at its RNAV ofRM3.30, due to its strong branding and focus on strategically locatedinvestment-driven properties. YTD, YTL has bought 11m shares (at betweenRM0.69-RM1.57).