TA Research noted that Sunway aims to achieve new sales of RM2.3bil in 2023.
PETALING JAYA: New property launches, unbilled sales of RM4.4bil and a strong domestic economy are factors that have analysts keeping faith in Sunway Bhd
.
TA Research noted that Sunway aims to achieve new sales of RM2.3bil in 2023 with first quarter (1Q23) sales ending March 31 already amounting to 21% of the target.
The group plans to launch projects worth RM3.5bil, 77% of that value will be from Singapore launches, the research house noted.
“We understand Sunway has rolled-out all scheduled launches in Singapore.
“Despite recent cooling measures in Singapore, Sunway believes foreign investors are still interested in investing there, as geopolitical tension has increased Singapore’s attraction as a financial outpost and safe haven,” it explained.
Sunway currently holds unbilled sales of RM4.4bil and an outstanding construction order book of RM3.8bil, which gives its earnings visibility for the next three to four years.
Furthermore, TA Research said the strengthening domestic economy augured well for Sunway’s leisure, hotel and healthcare segments, which are expected to benefit from inbound leisure tourism and medical tourism as international travel normalises post-Covid.
“While the property development division may face challenges from rising interest rates and cooling measures in Singapore, the ongoing economic recovery is expected to mitigate the impact,” TA Research added.
MIDF Research said Sunway’s new property sales of RM505mil in 1Q23 were mainly contributed by overseas projects in Singapore and China which cumulatively contributed to 56% of the figure.
Sunway launched Sunway Flora in Bukit Jalil and Sunway Dora in Penang in 1Q23 and the take-up rates stood at 53% and 73%, respectively.
Its unbilled sales were flattish at RM4.39bil in 1Q23, MIDF Research stated.
Sunway posted a core net income of RM147.6mil in 1Q23, supported by its property investment division.
Its 1Q23 core earnings were 36% lower quarter-on-quarter, mainly due to a lower contribution from most of its business divisions.
On a year-on-year basis, however, 1Q23 core net income was 26.7% higher.
TA Research has maintained its “buy” call on Sunway with a new target price (TP) of RM2.27 a share (RM2.28 previously) based on a sum-of-parts valuation.
MIDF Research remains “neutral” on Sunway with an unchanged TP of RM1.66 a share while holding steady its earnings forecast for financial year 2023 (FY23)-FY25.
