Sunway’s 4Q, FY23 in line with growth estimates

KUCHING: Sunway Bhd’s (Sunway) 4Q23 core net profit of RM187.2 million for its fourth quarter of financial year 2023 (4QFY23) was in line with analysts expectations.

2023 locked-in sales of RM2.4 billion were four per cent above its FY23 sales goal of RM2.3 billion - a growth of 20 per cent year on uear (y-oy) -- but in line with Maybank Investment Bank Bhd’s research team’s (Maybank Research) sales assumption.

To note, Sunway has set a higher sales target of RM2.6 billion for FY24.

“Sunway’s 4Q23 net profit of RM187 million liªed FY23 core net profit to RM659 million, accounting for 96 and 100 per cent of our/consensus’ FY23 – in line,” it said in its notes.

“All business divisions reported stronger earnings in FY23 except for healthcare and other business.”

Sunway has locked in RM2.4 billion property sales in FY23, or four per cent above its FY23 property sales target. Of the RM2.4 billion, 39 per cent was from its joint venture (JV) projects in Singapore, seven per cent from China, seven per cent from Johor and the remaining from the Klang Valley.

“Sunway has set a higher sales target of RM2.6 billion for FY24. Effective unbilled sales were RM3.6 billion as at December 2023.

Elsewhere, 64 per centowned Sunway Construction Group has secured RM2.5 billion worth of jobs in 2023, sustaining its outstanding orderbook of RM5.3 billion as at December 2023.

“We raise our earnings forecasts by two to six per cent.”

Meanwhile, the team with Kenanga Investment Bank Bhd (Kenanga Research) anticipate for Sunway to maintain strong performance across its diverse portfolio.

“Strategic launching of projects in established townships and continued development in existing ones should bolster the property development arm,” it said in its own notes.

“Despite concerns about inflationary pressures potentially impacting consumer spending, the group’s diversified property investment portfolio is poised to maintain stability, with the possibility of a weakening ringgit a¨racting tourists.

“Additionally, we foresee expansion in the results of its healthcare joint venture, particularly with the forthcoming opening of several new hospitals over the next two years and medical tourism sector.

“Post results, we slightly raise our FY24 earnings by two per cent which is mainly fuelled by stable property investment performances but with some possible easing in the property development arm.

“That said, its 26 per cent EPS growth from FY23 is mostly a¨ributable to be¨er associate returns, namely from the handover of a Singaporean executive condominium project which will bring about lumpy profit contributions.”