Sunway’s property sales on track to break target


Iconic Sunway pyramid's lion

PETALING JAYA: Sunway Bhd’s full-year prospects are expected to continue to be supported by strong property sales.

Sunway recorded property sales of RM1.16bil in the first quarter ended March 31,2021 (Q1), which are higher than new sales of RM357mil in the Q4 of financial year 2020 (FY20).

The exciting sales were mainly driven by projects in Singapore.

The strong sales in Q1 of FY21 would mean that full-year sales are on track to be above management’s full-year target of RM1.6bil.

While Sunway’s management is maintaining its sales target at the moment, MIDF Research reckoned that it may revise the sales target upwards later.

Note that unbilled sales increased to RM3.3bil in Q1 of FY21 from RM2.4bil in Q4 of FY20.

For Q1 of FY21, the group had registered a net profit of RM58.45mil, compared with RM62.4mil a year earlier despite a 4.7% increase in revenue to RM1.02bil.

The lower earnings, dragged by the property development and property investment divisions, notably came in below MIDF’s expectations.

“We revise our FY21/FY22 earnings forecast by -28.5%/-20.4% respectively to reflect the lower contribution from property development and property investment divisions, ” it said in a report.

The research house has kept its “neutral” rating on the stock with a target price of RM1.55 given the lack of an immediate catalyst in the near term.

However, RHB Research opined that the potential disposal of its minority stake in Sunway Healthcare could be a share price catalyst over the near term.

The research house also expects Sunway’s Q2 earnings to be much weaker due to the imposition of the movement control order 3.0 and has cut its FY21-FY23 earnings estimates by 32%-39%.

Nonetheless, it has maintained a “buy” recommendation on Sunway, albeit with a lower target price of RM1.92.

“Our valuation comprises a 40% discount to the revalued net asset value for the property business, 15 times price earnings ratio for the trading division, and 32 times for the healthcare segment.”

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Sunway , property sales , break target , healthcare ,

   

Next In Business News

SCIB JV accepts RM138.5mil contract for Terengganu roadworks
T7 Global to provide ROV underwater services for 10 platforms
AIA Malaysia taking up minority stake in TNG Digital
FBM KLCI falls on new Covid record
SME Corp, MIDF launch SME revitalisation financing plan
Chinese tutoring firms extend plunge as Beijing cracks down
MyCC monitoring food delivery platform firms
Ringgit opens marginally as Covid cases surge
Foreign funds' net selling slows
Bitcoin surges toward US$40,000 level

Stories You'll Enjoy


Vouchers