Sunway beats consensus estimates on strong property division rebound in the region

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STRONG OUTLOOK: Photo shows Sunway Group’s headquarters, Menara Sunway. Sunway has exceeded the market’s expectations for the group’s financial results for the 4QFY12, underpinned by the group’s strong rebound of its property division.

STRONG OUTLOOK: Photo shows Sunway Group’s headquarters, Menara Sunway. Sunway has exceeded the market’s expectations for the group’s financial results for the 4QFY12, underpinned by the group’s strong rebound of its property division.

KUCHING: Sunway Bhd (Sunway) has exceeded the market’s expectations for the group’s financial results for the fourth quarter of the financial year 2012 (4QFY12), underpinned by the group’s strong rebound of its property division.

According to the research arm of RHB Research Institute Sdn Bhd (RHB Research), Sunway Bhd’s 4QFY12 core net profit of RM114.1 million (an increase of 14.9 per cent year on year and an increase of 20.6 per cent quarter on quarter) came in six per cent above the research firm and market’s expectations.

The research firm outlined Sunway achieved RM1.83 billion property sales last year, up from RM1.22 billion in September.

A large chunk of the sales was contributed from the Singapore projects, followed by Sunway GEO South Quay, and Velocity Designer Suites, it added, noting that the average take-up rate for these projects were 70 to 80 per cent.

“Going into FY13, Sunway has a lower sales target of RM1.3 billion, on the back of RM1.5 billion worth of launches. The lower guidance is mainly attributed to the lack of Singapore projects this year, as the Novena project will only be rolled out in end 2013.

“However, we think Sunway could potentially surprise the market, given the type of products that it plans to launch,” the research firm opined.

It further noted, Sunway was planning to launch projects such as Bukit Lenang JB, Velocity, Sunway GEO and Sunway Eastwood, with both Bukit Lenang and Sunway GEO projects located in matured areas, and hence, it opined, there would be natural demand for the properties.

“Velocity, being close enough to the city centre, will pick up as prices for the properties in the outer KL city area are catching up fast,” the research firm added.

Additionally it pointed out, future earnings would be backed by RM2.78 billion unbilled sales (from RM2.41 billion) and construction order book of RM3.187 billion.