PETALING JAYA: Sunway Construction Bhd, the builder of the country’s first elevated dedicated bus lane in Bandar Sunway, is a strong contender to bid for the expansion of the project, analysts said.
This should fire up interest in the company, which is said to be planning to sell its shares to the public as early as next month.
The second bus rapid transit (BRT) system is being planned to link Central Market in Kuala Lumpur to Klang in Selangor. The 40km stretch will be built along the Federal Highway.
Sunway Construction has “a strong track record advantage when bidding opens for the next BRT line,” said CIMB Research analyst Sharizan Rosely.
“Order book drivers continue to be more building works-focused but this could change going into 2016. The group is one of seven finalists for the RM9bil LRT 3 PDP package, a potential earlier winner of MRT 2 elevated viaduct packages by our estimates,” he said in a report last week,
Generally, Sharizan expected about 40% growth in the RM2.8bil construction order book to RM4bil for the IPO-bound company was achievable by end of this year.
The market for IPO had cooled down considerably following the lacklustre showing by Malakoff Corp Bhd recently.
The RM634mil Sunway BRT, where Sunway Construction contributed RM123mil to the project, was recently launched by Prime Minister Datuk Seri Najib Tun Razak.
“The poser is to invest in the parent company that will receive hefty special dividend from the listing of Sunway Construction,” one analyst said when contacted by StarBiz.
Sunway Bhd has gone up by more than 10% year-to-date to end at RM3.52 on Bursa Malaysia last Friday. Post-Sunway Construction’s listing, it will be among the largest pure play construction companies in Malaysia.
Most other construction companies from among the bigger players such as Gamuda Bhd and IJM Corp Bhd also derive their earnings in part from the property industry.
MIDF Research expected more interest on Sunway Bhd in view of potential special dividend in the next two months.
“The amount should be in the range of 22 sen to 25 sen subject to the actual amount of proceeds to be raised from Sunway Construction’s IPO,” it said in recent report.
The Sunway BRT was 70% funded by Prasarana Malaysia Bhd, 15% by Sunway Bhd and 15% by the Government’s public-private partnership (PPP) facilitation fund called UKAS.
However, Sunway Construction is expected to receive stiff competition from the usual suspects when Prasarana opens the tender next year.
A source close to Prasarana said the second BRT with longer route of more than 40 km would not be elevated and to be supported by Prasarana standard stage buses.
“As the second BRT will be on the ground, it will have quite a high curb on each side of the lane.
“Prasarana needs to discuss with PLUS Malaysia Bhd, the concession holder of Federal Highway on the matter,” he said, adding that the ground-breaking for this project was slated for the end of next year,” said the source.
The 5.4km Sunway BRT, arguably the region’s first elevated electric bus service, offers 1,153 parking bays at its Park n’ Ride complex.
It will carry 2,400 passengers per hour this year and is expected to increase to 5,200 passengers per hour in 2035