Analysts confident Sunway will be able to deliver forecast earnings for the year
KUCHING: Analysts have revealed that they are confident that Sunway Bhd (Sunway) will be able to deliver their forecast earnings for the year.
This outlook comes after Sunway’s first half of 2017 (1H17) core net profit (CNP) of RM248.1 million came inline with the research arm of Kenanga Investment Bank Bhd’s (Kenanga Research) fullyear estimate but below consensus’ at 47 per cent and 43 per cent, respectively.
“We believe that consensus could be slightly bullish with their development margin assumptions, especially on its property development division,” Kenanga Research said.
Sunway’s 1H17 property sales stood at RM376 million which was still lagging behind Kenanga Research’s and management’s full-year target of RM1.1 billion.
However, the research arm believed that its and management’s sales target is achievable largely due to timing of launches, which are skewed towards 2H17.
On another note, Sunway’s single-tier interim dividend of seven sen was declared, which made up 73 per cent of the research arm’s full-year expectation of 9.5sen.
“In terms of earnings delivery, we are confident that Sunway would be able to deliver our forecast earnings for the year premised on its strong property unbilled sales of RM1.2 billion with two-year visibility, a robust outstanding order-book of RM4.3 billion that provides two to three year visibility and other divisions that have been generating decent growth,” kenanga Research said.
“In terms of property sales, we are expecting a stronger 2H17 performance largely due to timing of launches, which are skewed towards 2H17.”
Post results, there were no changes to Kenanga Research’s finacial year 2017 to 2018 estimate (FY17 to FY18E) CNPs of RM522 million and RM543 million, respectively.