PETALING JAYA: Sunway Bhd
remains supported by near-term catalysts from stronger-than-expected construction wins, conversion of land in Johor to freehold status and healthcare listing in early 2026.
UOB KayHian Research (UOBKH Research) said, in the longer term, the property development segment is backed by strong sales from phased launches, strategic landbanking, and exposure to the Johor-Singapore Special Economic Zone (JS-SEZ).
“These collectively offer defensive qualities in the face of rising geopolitical tensions,” the research house said in a report recently.
Last week, a joint venture (JV) between Sunway and Singapore’s Sing Holdings Residential Pte Ltd (SHRPL) secured a 99-year leasehold residential site at Chuan Grove, Singapore for S$703.6mil (RM2.33bil), following a successful tender awarded by the Urban Redevelopment Authority of Singapore.
Located near Lorong Chuan MRT Station on the Circle Line, the site enjoys good accessibility and is close to schools and major expressways.
The high-rise project comprises three towers with about 550 units and is expected to be developed over 60 months or earlier, with a launch target in the second half next year (2H26).
SHRPL and Sunway Developments Pte Ltd (SDPL) will incorporate a JV company, in which SHRPL and SDPL will have equity interest in the proportion of 65:35 at a later date, to undertake the development of the land.
SDPL is a wholly owned subsidiary of Sunway Holdings Sdn Bhd, which in turn is a wholly owned subsidiary of Sunway.
UOBKH Research said while the gross development value (GDV) is still yet to be finalised, it could fall around S$1.4bil (RM4.7bil), assuming a typical land-cost-to GDV ratio of 50%.
“We estimate the project to contribute S$10mil to S$15mil (RM33mil to RM50mil) per year, based on its 35% stake, development period of five years, and net margin of 10% to 15%, equivalent to 3% to 4% of our 2027 earnings forecast,” the research house said.
UOBKH Research added that while it anticipates a moderate earnings blip in 2025 from lumpy profit recognition of Sunway’s Singapore projects, the research house is positive on the long-term growth prospects.
“The positive outlook is underpinned by strong sales from phased launches, ongoing land conversion from the private lease scheme to freehold status in Medini, Johor and recent uptick in land replenishment,” UOBKH Research said.
Unlike other research houses, MBSB Research maintained a “neutral” call for Sunway with an unchanged target price of RM5.01.
The research house kept its earnings forecast for financial year 2025 (FY25), FY26 and FY27, noting that net gearing is expected to increase to 0.49 times from 0.44 times in the first quarter of financial year 2025 (1Q25) after the award of land in Singapore.
“We see the listing of Sunway Healthcare Group which is expected by 1H26 to be the near-term catalyst to Sunway Bhd.
“Nevertheless, we opine that all the positives have been priced in for now,” MBSB Research said.
Meanwhile, TA Research said Sunway’s entry into Chuan Grove is “well positioned to capture demand”, given the site’s prime location within the “mature and established” Serangoon planning area.
“Additionally, the robust participation in the land tender, with the top four bids clustered within a 10% range, reflects broad developer confidence in the site’s value.
“Notably, the winning bid of S$1,376 per sq ft per plot ratio (psf ppr) ranks as the second highest outside central region (OCR) land bid in 2025, just slightly below the SG$1,388psf ppr benchmark set at Bayshore Road. This signal continued optimism for well-located OCR developments,” the research house said.
TA Research has a “buy” call on Sunway with a target price of RM5.68.
Further, RHB Research revised its FY27 earnings upwards, raising its forecast by 5% as the project will be launched in 2H26.
“Meanwhile, FY25 to FY27 earnings will be underpinned by strong unbilled sales of RM4.06bil and construction order book of RM6.6bil,” the research house said.
RHB Research maintained a “buy” call on Sunway with a target price of RM5.81.
Moreover, the group’s construction segment is in for a multi-year earnings growth trajectory underpinned by progress billing from inhouse infrastructure job flows and data centre-related projects.
“We understand that existing data centre tenders are progressing without delays, rebutting concerns on slowdown in award of data centre contracts. Management remains confident to achieve a RM6bil order book target in 2025,” the research house said.
Beyond the latest contract win, UOBKH Research said Sunway’s healthcare segment is in expansion mode, and the “strategic” hospital expansion is backed by structural and tourism demand.
“The healthcare segment is poised to ride on the ageing population, rising non-communicable diseases, and the momentum of Tourism Malaysia Year 2026, which includes medical and wellness tourism as part of the promoted areas.
In line with this, management targets to increase its foreign patients mix to 15% by the end of this year (from 13% in 1Q25),” the research house said.
UOBKH Research also stated Sunway’s healthcare listing is on track for early 2026, “potentially unlocking significant shareholder value”.
“We estimate a potential market valuation of RM16bil to RM19bil, based on 22 times to 26 times 2027 earnings before interest, taxes, depreciation, and amortisation of RM765mil.
