PETALING JAYA: Sunway Bhd
’s upcoming third quarter of financial year 2026 (3Q26) results will be supported by its key subsidiaries, Sunway Construction Group Bhd and Sunway Healthcare Holdings Bhd, which are slated to deliver year-on-year (y-o-y) growth in net profit, says CGS International (CSGI) Research.
Sunway is expected to release its 3Q26 results in late-November.
For construction, the research house expects an acceleration in its order book of RM10.5bil.
“This will mainly come from data centres (DCs), although construction pre-tax margins should have normalised to 10% to 12% from 4Q25 to 2Q26’s 13% to 17% margins that were lifted by early completion incentives and the finalisation of accounts for one DC,” said CGSI Research in a recent report.
As for healthcare, the research house expects both y-o-y and quarter-on-quarter (q-o-q) growth in net profit with higher contributions from its new hospitals in Ipoh and Damansara, while the second half of financial year 2026 (2H26) is also typically a seasonally stronger period.
For Sunway’s property development division, CGSI Research believes that 3Q26 presales will show q-o-q growth and the first nine months of financial year 2026 presales forecast should also be on track to hit its financial year 2026 (FY26) target of RM4.2bil, up by 11% y-o-y.
Moreover, 1H26 property presales was RM2.3bil, accounting for 55% of its FY26 target. Overall, the research house is comfortable with its revised FY26 forecast earnings on Sunway, which assumes 8% growth y-o-y.
“We leave our FY26 earnings per share (EPS) forecast relatively unchanged, but raise FY27 to FY28 EPS forecasts by 5% to 7%,” the research house added.
The raised FY27 EPS forecast factors in one Executive Condo project in Singapore, Novo Place with gross development value (GDV) of S$790mil, which is a joint-venture with Hoi Hup Realty launched in November 2024 and has since been 100% sold.
This is due for handover in December 2027.
For FY28, the higher earnings forecast factors in another Executive Condo project in Singapore, Otto Place (GDV S$1.05bil), which was launched in July 2025, has also been 100% sold, and is due for handover in 1Q28.
Meanwhile, CGSI Research said Sunway’s share price has fallen by 20% over the past three months and is now trading at 20 times the FY27 forecast price-to-earnings ratio, below mean levels since FY22.
“We acknowledge the stock still lacks a major re-rating catalyst with the failed takeover of IJM Corp Bhd and the listing of Sunway Healthcare in March 2026.”
CGSI Research said there has been no material change in Sunway’s business fundamentals, adding that “we argue it offers a more balanced exposure to the many pillars of a growing Malaysian economy (construction, property, healthcare) and should be a core holding in institutional investors’ portfolios”.
The research house has upgraded Sunway to an “add” call and revised its target price to RM5.20 per share.
Furthermore, the re-rating catalysts for the stock include stronger earnings from property and construction while the downside risks are slowing economy affecting its property sales and rising raw material costs.
