Sunway Berhad / Jeffrey Cheah

Re: Sunway Berhad / Jeffrey Cheah

Postby winston » Tue Dec 05, 2017 8:41 am

not vested

Rating: Outperform

Target price: RM1.82

SUNWAY Bhd’s nine-month core net profit of RM398.9mil was in line, making up 76% and 71% of Kenanga Research’s and street’s full-year estimates.

The research firm said Sunway’s nine months of 2017 property sales of RM583mil appeared sluggish compared with the house and management’s full-year target of RM1.1bil.

“We deem it is still on track, banking on a strong fourth quarter 2017 where the bulk of its new launches of RM1.1bil are skewed towards late third quarter 2017.

“Furthermore, most of its launched projects have achieved estimated take up rates of 50%,” Kenanga said.

Kenanga explained that Sunway’s core net profit grew 6% year-on-year (y-o-y) underpinned by a 9% growth in revenue, 7% reduction in net financing cost, decline in minority contributions by 24% and improvements in associate/joint controlled entity as well as lower effective tax rate of 15%.

On a positive note as well, Kenanga said Sunway’s net gearing also came down to 0.37 times vis-à-vis 0.46 times back in 2Q17 due to proceeds from the conversion of Esos and lower net borrowings.

Going forward, the house is confident that Sunway would be able to deliver its forecast earnings and targeted sales of RM1.1bil for the year.

“This is premised on its property unbilled sales of RM0.9bil with 1.5-year visibility, a vigorous outstanding order book of RM6.8bil that provides two to three years visibility and other divisions that have been generating decent growth.

“As for its property sales, we are expecting a strong performance in the fourth quarter of 2017, given that most of the new local launches have achieved take up rate of 50%, coupled with an unsold gross domestic value (GDV) of RM400mil,” the house noted.

Kenanga made no changes to its financial year 2017 (FY17) to FY18 forecast core net profit of RM522mil to RM543mil.

It upgraded Sunway to “outperform” from “market perform” as the share price has retraced in line with weak market sentiment and overreactions to negative news flow.

Kenanga’s sum-of-parts-driven target price of RM1.82 remained unchanged.

Risks include weaker-than-expected property sales and construction replenishment, higher-than-expected administration costs, negative real estate policies and tighter lending environment.

Source: Kenanga Research
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Re: Sunway Berhad / Jeffrey Cheah

Postby winston » Wed Dec 27, 2017 7:21 pm

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SUNWAY BHD

Rating: Outperform
Target price: RM1.82

SUNWAY Bhd’s nine-month core net profit of RM398.9mil was in line, making up 76% and 71% of Kenanga Research’s and street’s full-year estimates.

The research firm said Sunway’s nine months of 2017 property sales of RM583mil appeared sluggish compared with the house and management’s full-year target of RM1.1bil.

“We deem it is still on track, banking on a strong fourth quarter 2017 where the bulk of its new launches of RM1.1bil are skewed towards late third quarter 2017.

“Furthermore, most of its launched projects have achieved estimated take up rates of 50%,” Kenanga said.

Kenanga explained that Sunway’s core net profit grew 6% year-on-year (y-o-y) underpinned by a 9% growth in revenue, 7% reduction in net financing cost, decline in minority contributions by 24% and improvements in associate/joint controlled entity as well as lower effective tax rate of 15%.

On a positive note as well, Kenanga said Sunway’s net gearing also came down to 0.37 times vis-à-vis 0.46 times back in 2Q17 due to proceeds from the conversion of Esos and lower net borrowings.

Going forward, the house is confident that Sunway would be able to deliver its forecast earnings and targeted sales of RM1.1bil for the year.

“This is premised on its property unbilled sales of RM0.9bil with 1.5-year visibility, a vigorous outstanding order book of RM6.8bil that provides two to three years visibility and other divisions that have been generating decent growth.

“As for its property sales, we are expecting a strong performance in the fourth quarter of 2017, given that most of the new local launches have achieved take up rate of 50%, coupled with an unsold gross domestic value (GDV) of RM400mil,” the house noted.

Kenanga made no changes to its financial year 2017 (FY17) to FY18 forecast core net profit of RM522mil to RM543mil.

It upgraded Sunway to “outperform” from “market perform” as the share price has retraced in line with weak market sentiment and overreactions to negative news flow.

Kenanga’s sum-of-parts-driven target price of RM1.82 remained unchanged.

Risks include weaker-than-expected property sales and construction replenishment, higher-than-expected administration costs, negative real estate policies and tighter lending environment.

Source: Kenanga Research
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Re: Sunway Berhad / Jeffrey Cheah

Postby winston » Mon Mar 12, 2018 9:56 am

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Trading Buy: SUNWAY - 5211
(Last price: RM1.59, Potential upside +14.5%)

Company Profile
• Established in 1974, Sunway Group is one of Malaysia’s largest conglomerates with core interests in property, construction, education and healthcare.

Trading Catalyst
• HLIB has a BUY rating with TP of RM2.30, or 44.7% upside.
• HLIB believes Sunway (12.8x FY12/18 P/E) should be rerated and trade closer to its peers such as IJM (15.4x FY3/19) and Gamuda (15.4x FY7/18) given its diversified income stream and declassification from property sector (now Trading and Services), coupled with its integrated real estate business model (potential spin-off to unlock values).
• The stock is also a cheap entry to booming medical tourism via Sunway, which is trading at 12.8x FY18 P/E as compared to IHH 49x and KPJ of 22x.
• Grossly oversold with potential downtrend breakout to reach RM1.72-1.82 in the long term.

Technical View
• Resistance: RM1.66 / RM1.72 / RM1.82
• Support: RM1.56 / RM1.49
• Cut loss: RM1.48

Key Financial Stats
• Trading at undemanding 12.8x FY18 P/E, supported by a steady FY17-19 EPS CAGR of 10% and decent DY of 4.0-4.5% for FY18-19.

Source: Bloomberg, HLIB
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Re: Sunway Berhad / Jeffrey Cheah

Postby winston » Tue May 22, 2018 8:58 am

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Sales to pick up post-GE14
Earnings in line but sales fell short

Sunway’s 1Q18 net profit came in as expected but sales were below expectations on the lack of new launches in view of weak buying sentiment pre-GE14.

As for its construction business, SCG has secured MYR542m of new jobs (including precast) YTD, lifting outstanding orderbook to MYR6.1b as at end-Mar 2018.

We lower earnings forecasts by -0.4% to -4% following the cut in SCG’s FY18-20 earnings forecasts.

RNAV-TP is largely unchanged at MYR1.99 (-3sen; on 0.75x P/RNAV). BUY

Source: Maybank

https://factsetpdf.maybank-ke.com/PDF/9 ... 73ec73.pdf
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Re: Sunway Berhad / Jeffrey Cheah

Postby winston » Wed May 23, 2018 11:13 am

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Another steady quarter

1Q18 results met expectations
Lifted by strong performance from property investment
Maintain HOLD but lower SOP-derived TP to RM1.60 on lower valuation for construction arm

Source: DBS

https://researchwise.dbsvresearch.com/R ... VyaWRAQA==
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Re: Sunway Berhad / Jeffrey Cheah

Postby winston » Wed Jul 11, 2018 11:58 am

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Rising contribution from Property Investment and Construction to offset weaker Property Development

Spinoff of healthcare business not in the near term
Resilient integrated business model to weather challenging property market
Maintain HOLD with RM1.65 TP

Resilient business model

Challenging property market to limit share price re-rating potential.

Sunway’s focus on sustainable township developments has resulted in stable property sales (RM1.7bn1.8bn in FY12-14).

However, the weak sentiment in the property markets in Malaysia has made it challenging for Sunway to sustain its high sales momentum, as property sales dipped to RM1bn in FY17 which is the lowest over the past five years.

While non-property divisions have been growing healthily over the years, the slowdown in property development may dampen its overall growth prospects given its still sizeable
contributions. Therefore, we reiterate our HOLD rating in view of the lack of re-rating catalysts.

Source: DBS

https://researchwise.dbsvresearch.com/R ... VyaWRAQA==
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Re: Sunway Berhad / Jeffrey Cheah

Postby winston » Thu Aug 16, 2018 10:19 am

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2018 sales could exceed target

Diversification bearing fruit

Despite the relatively weak demand for its property projects in Malaysia, Sunway’s Singapore and Tian Jin (China) projects have received overwhelming responses; this could lead to its MYR1b sales target for 2018 being surpassed.

Elsewhere, uncertainties from the cost-down of the KVLRT 3 project could weigh on earnings.

We maintain our earnings forecasts for now but lower our TP to MYR1.85 (on a lower 0.7x P/RNAV
peg [-0.05x]). Maintain BUY

Source: Kim Eng

https://factsetpdf.maybank-ke.com/PDF/1 ... 0105a4.pdf
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