Sunway’s outlook remains positive from strong property, construction divisions
KUCHING: Sunway Bhd’s (Sunway) outlook remains positive, driven by strong contributions from its property and construction segments, analysts say.
Following a recent meeting with the company, the research arm of AmInvestment Bank Bhd (AmInvestment) said: “We believe the outlook for Sunway remains positive premised on its unbilled sales of RM2.1 billion, strong income contribution from property investment and a robust construction outstanding order book of RM6 billion.”
It noted that Sunway’s property division is targeting RM1.3 billion new sales for FY19, which is 28 per cent lower than FY18’s actual new sales of RM1.8 billion. There are also several launches lined up in 2019 with a combined GDV of RM2 billion.
Aside from that, it said the company launched several projects in 2018 with a combined GDV of RM2.07 billion.
“These launches have been well received with average take-up rates and bookings of more than 80 per cent,” it added.
Meanwhile, AmInvestment pointed out that Sunway is looking to grow its grow its healthcare segment as Sunway sees a bright spot in the healthcare industry with the increasing demand for healthcare services and a growing medical tourism industry.
“Sunway Medical is embarking on an extensive expansion plan to build four more hospitals. The new hospitals will be within its integrated developments in Sunway Velocity, Seberang Jaya, Sunway Damansara and Sunway City Ipoh.
“The Sunway Velocity hospital is at the final phase of construction and is expected to be completed by 2H19,” it added.
It also noted that groundwork has begun in the Seberang Jaya, Penang hospital and the building is scheduled for completion in 2020. All in, AmInvestment upgraded its call to ‘buy’ from ‘hold’.
It also raised its FY19, FY20 and FY21 earnings by 3.8, 4.3 and 4.5 per cent respectively to reflect the timing of revenue recognitions of property development division given its strong take-up rates.