Sunway’s 1Q17 net profit meets expectations

KUCHING: With Sunway Bhd’s ( Sunway) first quarter of 2017 (1Q17) net profit meeting expectations, analysts remain optimistic on Sunway’s ability in delivering a sturdy performance for the year.

In a filing on Bursa Malaysia, Sunway reported that the group recorded profit before tax of RM153.1 million for the current quarter ended March 31, 2017, compared to RM176.1 million in the corresponding quarter of the previous financial year.

Sunway’s 1Q17 core net profit ( CNP) of RM107.9 million was within the research arm of Kenanga Investment Bank Bhd’s ( Kenanga Research) but below streets’ full-year estimates at 21 per cent and 19 per cent, respectively.

“Property sales registered in 1Q17 was sharply slower at only RM142 million, vis-à-vis our and managements’ target of RM1.1 billion,” Kenanga Research said.

“We believe that streets’ might be slightly aggressive on its assumptions for its property development division margin and billing progress, while its slow sales are due to the lack of new launches.”

While Sunway might have kicked off the year with a slower set of results, Kenanga Research remained confident with Sunway’s ability in delivering a sturdy performance for the year premised on the group’s strong unbilled sales of RM1.4 billion with two-year visibility, a robust outstanding order book of RM4.6 billion that provides two to three year visibility and other divisions that has been generating decent growth over the years.

That said, the research arm also expect Sunway’s sales to pick up once the group launched its RM2 billion worth of projects, resulting in its development margins to normalise from 2Q17 onwards.

Meanwhile, Sunway’s 1Q of financial year 2017 (1QFY17) net profit accounted for 20 per cent of AmInvestment Bank Bhd’s (AmInvestment Bank) fullyear forecast and 19 per cent of consensus.

AmInvestment Bank deemed this to be broadly in line as the research firm expected stronger performance ahead for the group for the rest of the year.