PETALING JAYA: Analysts remain constructive on Sunway Bhd
, viewing its latest land acquisition in Singapore as a strategic move that strengthens its long-term growth pipeline, although opinions differ on near-term upside.
TA Research has upgraded the stock to “buy” with a higher target price (TP) of RM5.81, while MBSB Research maintained its “neutral” call with a revised TP of RM5.28.
The optimism stems from Singapore-based Sunway MCL’s successful bid for the River Valley Green (Parcel C) site in Singapore.
The consortium, comprising Sunway MCL and CSC Land Group, secured the 99-year leasehold site for S$750.6mil (RM2.4bil) through a 60:40 joint venture.
The development is expected to comprise more than 500 residential units with an indicative gross development value (GDV) of S$1.4bil, translating into an effective GDV of about RM2.7bil attributable to Sunway.
TA Research described the award as positive, noting that it marks Sunway’s first Singapore land acquisition in 2026 and the first new Government Land Sales (GLS) award under Sunway MCL following the group’s acquisition and rebranding of MCL Land.
“Overall, we are positive on the award as it adds another sizeable project to Sunway’s Singapore residential pipeline after the acquisition and rebranding of MCL Land,” it added.
The research house said the latest purchase demonstrates that Sunway is not only taking over MCL’s existing portfolio, but it is also replenishing landbank in Singapore.
It added that the project will contribute another RM2.7bil in effective GDV to the group’s Singapore operations.
The site occupies a prime location in Singapore’s District 9, adjacent to the Great World MRT Station and close to Orchard Road, Marina Bay, the Central Business District and established lifestyle precincts.
TA Research believes these attributes will support demand from both owner-occupiers and investors.
It also highlighted strong sales achieved by nearby projects such as River Green and River Modern, suggesting the area continues to enjoy healthy residential demand.
The winning bid of S$1,730 per sq ft per plot ratio set a new benchmark for recent GLS sites in the River Valley and Zion area.
TA Research does not regard the bid as excessive.
It pointed out that the four bids received were closely clustered, with Sunway MCL’s offer only 4.1% above the second-highest bidder, indicating that pricing was broadly in line with market expectations.
The estimated land cost-to-GDV ratio of about 54% also falls within the typical range for prime Singapore residential developments.
TA Research maintained its earnings forecasts as the project’s contribution lies beyond its current forecast horizon.
Nevertheless, it upgraded Sunway to “buy”, citing resilient property sales, continuing earnings upcycle at Sunway Construction Group Bhd, which remains a key proxy to Malaysia’s data centre investment theme, and steady healthcare earnings growth.
MBSB Research also views the acquisition favourably, saying it will expand Singapore development footprint of Sunway and reinforces the group’s strategy following the acquisition of MCL Land.
However, the research house expects the land purchase to lift net gearing to 0.38 times from 0.32 times in the first quarter of financial year 2026 due to funding through internal funds and borrowings.
Despite acknowledging that the group’s growing presence in Singapore should support long-term growth, MBSB Research believes there are limited immediate catalysts. It has maintained its “neutral” stance.
