Sunway’s outlook remains positive

KUALA LUMPUR: The outlook for Sunway Bhd (Sunway) remains positive, analysts opine, based on factor ssuch as improving unbilled sales and stable income contribution from property investment.

Following a recent engagement with the company on Sunway’s latest development, AmInvestment Bank Bhd (AmInvestment Bank) highlighted that the group’s balance sheet remained healthy with a net gearing ratio of 32 per cent as of the first nine months of financial year 2019 (9MFY19).

“With the capital expenditure (capex) requirement for the expansion of its healthcare business and ongoing property development, we expect its net gearing to stay above 30 per cent in the next three years,” the research firm said.

“We believe the outlook for Sunway remains positive premised on its improving unbilled sales of RM2.7 billion, stable income contribution from property investment, a robust outstanding order book of RM5.8 billion and strong growth potential in healthcare business.”

AmInvestment Bank noted that Sunway’s property division is targeting new sales of RM2 billion in FY20, which is 54 per cent higher than FY19’s target of RM1.3 billion.

It further noted that the company also lined up several launches for 2020 with a combined gross development value (GDV) of RM3.5 billion, compared to RM2 billion in FY19.

As such, AmInvestment Bank kept its FY19-21 earnings forecasts. Sunway’s core net profit estimates for FY19F, FY20F and FY21F thus remained at RM605.5 million, RM642.5 million and RM673.4 million, respectively.