The adverse impact of the lockdowns on Sunway’s leisure, hospitality and retail shopping malls segments was partly cushioned by the resilient performance in office space as most tenants are multinationals who were less affected.
KUCHING (January 20): Analysts have maintained their financial year 2021 (FY21F) earnings forecasts on Sunway Bhd (Sunway) despite the group exceeding its 2021 full-year sales target of RM2.2 billion by 16 per cent to an all-time record high of RM2.6 billion, up 92 per cent year on year (y-o-y).
“We believe our FY21F net profit is intact as the fourth quarter of FY21 (4QFY21) would need to contribute 41 per cent to the full-year earnings,” AmInvestment Bank Bhd (AmInvestment Bank) said.
“As a comparison, the group usually reports its strongest earnings in 4Q, which accounted for 37 per cent to 48 per cent over the last two years.”
Meanwhile, AmInvestment Bank’s recent virtual meeting with the group’s chief financial officer Chong Chang Choong provided some highlights which included that the majority of the strong FY21F sales was driven by projects in Singapore, of which earnings contribution will only be recognised progressively from FY22F onwards until completion and handover due to MFRS 15.
“Sunway plans to launch projects worth RM2.3 billion (down 28 per cent y-o-y) with a FY22F sales target of RM2.2 billion (down 16 per cent y-o-y).
“The focus of the lower launch and sales targets would be local developments (59 per cent), followed by Singapore (29 per cent) and China (12 per cent).”
AmInvestment Bank also gathered that the adverse impact of the lockdowns on leisure, hospitality and retail shopping malls segments was partly cushioned by the resilient performance in office space as most tenants are multinationals who were less affected.
However, the research firm expects the segment’s losses to decline in 4QFY21 as the visitor pick-up in theme parks was significant despite shorter operating hours following the easing of movement restrictions in October 2021.
“This is further lifted by improved booking rates in the hotel segment and increased footfall in retail shopping malls
which are supported by local tourists.”
As for Sunway Medical Centre Velocity which started operation 2 years ago, AmInvestment Bank noted that it has begun to turn around to operating profits from November 2021 onwards.
“The encouraging performance in this division is expected to grow further, underpinned by the potential synergy between Sunway Pharmacy and Mutlicare Health Pharmacy Sdn Bhd which has nearly 90 outlets throughout Malaysia.
“The expansion plan of Sunway Medical Centre Towers D, E and F together with Sunway Medical Centre Seberang Jaya, Penang are expected to be completed in 2Q22 while the wards will be opened in phases from the second half of 2022 (2H22) with an estimated capacity of 798 beds.
The research firm recalled that Sunway Healthcare segment reported stronger y-o-y and quarter on quarter (over 100 per cent) earnings in its first nine months of FY21 (9MFY21) and 3QFY21 despite foreign patients being prohibited from seeking medical treatments in Malaysia due to travel restrictions.