Sunway’s prospects supported by diversified businesses
KUCHING: Sunway Bhd’s ( Sunway) future prospects in the medium to long-term will be supported by its diversified businesses.
In a company report yesterday, AmInvestment Bank Bhd (AmInvestment Bank) maintained their ‘Buy’ call on Sunway as they are optimistic that the company’s prospects will be supports by its diversified businesses in integrated property, construction and healthcare.
According to the bank, outlook in its three main businesses are all looking promising.
In its integrated property sector, Sunway currently has several ongoing projects, namely the Sunway Velocity Two @ KL ( high rise residential); Sunway Serene @ Kelana Jaya ( high rise residential); Sunway Subang (industrial); The Grid @ Sunway Iskandar (mixed development); and Sunway Citrine Lakehomes @ Sunway Iskandar ( landed residential).
All in, the group’s current ongoing projects have a total gross development value (GDV) of RM1.35 billion.
The group has also launched several projects in the first half of 2018 (1H18) with a combined GDV of RM1.75 billion. These launches have been well received with takeup rates and bookings of at least 60 per cent.
Additionally, Sunway still has a total landbank of 3,308 acres and a remaining GDV of RM54.4 billion which provides them with longterm earnings visibility that will help drive the company’s growth going forward.
In construction, Sunway has managed to secure RM854 million year to date while its outstanding construction order books is at RM5.6 billion – indicating stable income for the division over the next one to two years.
While the construction sector is expected to go through a lull period, AmInvestment Bank foresees that there will still be opportunities for Sunway within the sector as they are currently attempting to rekindle past relationships with its former construction joint venture partners and seeking opportunities overseas.
“Sunway Construction sees opportunities in infrastructure projects in India such as highways, metro as well as high-speed rails,” said the bank.
Finally, in its healthcare business, Sunway is currently riding on increasing demand for healthcare services and a growing medical tourism industry.
To meet this growing deman, the group is embarking on an extensive expansion plan to build 4 more hospitals in its integrated developments – Sunway Velocity, Seberang Jaya, Sunway Damansara and Sunway City Ipoh.
With Sunway’s three main businesses to support its growth prospects in the future, AmInvestment Bank maintained its ‘ Buy’ call on the stock with a lower fair value of RM1.65 per share from RM1.71 based on a sum of parts valuation.
“We believe the outlook for Sunway shall remain stable premised on its strong unbilled sales of RM1.4 billion, a robust outstanding order book of RM5.6 billion, expansion in healthcare business, and stable income from property investments and other divisions.”