PETALING JAYA: Sunway Bhd
remains a compelling proxy for domestic growth which is entering a new phase driven by structural reforms.
Hong Leong Investment Bank (HLIB) Research said one key reason was the group’s rapid expansion across various key sectors in the economy.
For instance, Sunway Construction Group Bhd (SunCon) current order book stands at RM8.2bil, while its tenderbook is RM15bil for this quarter – whereby RM4bil comprises high-certainty upsizing opportunities from existing clients.
“Notably, SunCon’s tender pipeline includes over 800 megawatts of data centre (DC) bids, it has a competitive edge in these tenders with a proven track record in the successful completion of several DCs ahead of schedule,” HLIB Research noted.
It added that it will maintain a buy call on the group with a higher target price (TP) of RM6.50 from RM5.54 as it imputes higher TP’s from SunCon and Sunway Healthcare Holdings Bhd.
RHB Investment Bank Bhd said the group’s first quarter of financial year 2026 had met its expectations, excluding the RM9.1bil remeasurement gain arising from the listing of Sunway Healthcare.
It noted that revenue from the property division was mainly supported by Sunway MCL and the sale of an education asset located in Sunway Square to Sunway Education Group.
Moreover, the disposal was worth RM357mil, resulting in a net gain of RM23.1mil.
However, the property investment division was affected by seasonal factors and slower tourism activities amid the ongoing Middle East conflict.
It is expected this segment will improve as newly opened assets mature.
With that, RHB Investment said it will maintain its financial year 2026 (FY26) to FY28 earnings forecasts with a TP of RM6.11.
Similarly, MBSB Research said it will make no changes to the group’s earnings forecasts for FY26 to FY28, it will however, revise the TP upward to RM5.26 from RM5.20.
“We update the valuation of SunCon and Sunway Real Estate Investment Trust in our sum-of-the-parts valuation.
“We see stable long-term prospects for Sunway Bhd, driven by growth of the property development division and healthcare division,” it said.
It added there was limited catalyst to the group overall, hence it will maintain its ‘neutral’ call.
However, CIMB Research said it will maintain a hold call with a lower TP of RM5.35 from RM5.40, as it preemptively cuts its FY27 and FY28 core profit estimates by 4.8% and 2.4% respectively.
“Our earnings downgrades reflect rising diesel and input costs, which could become more evident from the second half of FY26 onwards.
“We expect Sunway to continue extracting greater value from its integrated businesses after the group’s conditional voluntary takeover offer for IJM Corp Bhd.”
TA Research also said it will maintain a hold call on the stock, with a TP of RM5.77.
Furthermore, the research house said it’s comfortable with the group’s FY26 earnings visibility.
“Management remains positive on demand for well-located and transit-orientated projects, with a healthy response seen for recent launches such as Pinery Residences, Sunway Velocity 3 and Sunway Cochrane,” it said.
At time of writing, Sunway Bhd’s share price was RM5.30, it has a market capitalisation of RM36bil.
