PETALING JAYA: Diversified conglomerate Sunway Bhd
remains firmly on track to meet its property sales target of RM3.6bil for this year, having already secured RM2.3bil in sales in the first seven months of the year.
This was 64% of its full-year goal, said Maybank Investment Bank Research (Maybank IB).
Among its more recent launches was the Otto Place in Singapore last month.
The project, which has a gross development value of S$1bil, comprising serviced apartments achieved a 91% take-up rate.
Looking ahead, key launches in the second half of this year (2H25) include Sunway Serene 2, Sunway Cochrane, Sunway Majestic and Sunway Lakehills.
“As of June, effective unbilled sales stood at RM3.3bil, while Sunway Construction Group Bhd had secured RM3.8bil in new jobs, with an order book of RM6.7bil as of June 30,” Maybank IB said.
Close to half of Sunway Construction’s order book comprises data centre contracts, which command relatively better margins.
Commenting on Sunway’s core net profit of RM227.7mil for the second quarter of this year (2Q25), the research house said the performance was within expectations and lifted 1H25 core net profit to RM431mil.
It added that Sunway’s earnings performance tends to pick up in 2H25.
The 31% year-on-year (y-o-y) increase in 2Q25 core net profit was mainly driven by its construction business, thanks to accelerated progress on data centre projects.
As of June, the group’s net gearing also improved to 0.39 times, from 0.41 times at the end of 1Q25.
A four-sen first interim single-tier dividend was declared for the quarter compared with two sen for the same period last year.
Meanwhile, Kenanga Research expects Sunway Construction to continue being the largest earnings contributor, having already met 63% of its FY25 order book replenishment target of RM4.5bil to RM6bil.
“Towards 2H25, the group’s property development division should see better traction from its year-to-date launches of RM1.5bil on top of an additional RM2bil pipeline expected closer to 4Q25.
“For healthcare, SMC Damansara and SMC Ipoh may likely hamper earnings growth in the near-term as they ramp up operations.
“Still, we gather that revenue growth remains promising at 17% as the number of licensed beds for the group now stands at 1,647,” said Kenanga Research.
However, it said the stock’s valuations appear excessive following the run-up in its share prices.
“A strong re-rating could be in a higher-than-expected valuation for its healthcare unit’s planned listing.
“We maintain our ‘underperform’ call as current valuations still appear pricey,” the research house said.
That said, Kenanga Research raised Sunway’s target price to RM4.22 from RM4.14 following the target price increase for Sunway Construction to RM6.50 from RM5.66.
Ratings calls among analysts were mixed.
While Maybank IB had a “hold” call on Sunway, several others maintained their “buy” calls, noting that the group’s diversified business segments should help to cushion the impact of underperformance in any single segment.
TA Research, which has a “buy” rating and upside to RM5.76, said the planned initial public offering of Sunway Healthcare Group (SHG) is on track for 1Q26.
“SHG delivered 1H25 revenue of RM993mil, up 17% y-o-y, supported by stronger patient volumes, higher billings, better operating theatre utilisation, and maiden contributions from SMC Damansara and SMC Ipoh.
“Reported profit after tax (PAT) fell 14% due to gestation losses, but excluding the two new hospitals, adjusted PAT grew 17%, reaffirming the resilience of its core portfolio. Management expects SMC Damansara to turn earnings positive before interest, taxes, depreciation and amortisation by the end of this year and SMC Ipoh by 1Q26, consistent with its track record of achieving profitability within 12 months of opening,” the research house said.
The healthcare group now operates five hospitals with 1,662 licensed beds, with expansion in Putrajaya, Iskandar Johor and Seremban Sentral set to lift capacity beyond 3,000 beds by 2032.
