Monday, 12 March 2012

RHB Research maintains Outperform on Sunway, FV RM3.15

KUALA LUMPUR (March 12): RHB Research Institute is maintaining its Outperform on Sunway Bhd with a fair value of RM3.15.

It said the 691-acre Sunway Iskandar project with a GDV of RM12 billion will transform the profile of the company’s property development business.

RHB Research said on Monday the development could also benefit the precast division, and Sunway REIT is given the ROFR on the future developments of Sunway Iskandar.

“News flow on the MRT jobs is likely to pick up in 1H2012. Even if it loses out, we believe it will still be able to secure external jobs, and downside is mitigated with the recurring flow of internal jobs,” it said.

RHB Research said the recurring income from the 37%-owned Sunway REIT will see a bumper growth in 2014 upon the completion of AEI works at Sunway Putra Place.

“Stripping out the valuations of Sunway REIT, Sunway is currently trading at only 7.0 times to 8.0 times. Considering the decent landbank profile, the implied market value of its landbank is only at about RM14 psf. We reiterate our Outperform rating with an unchanged fair value of RM3.15,” it said.

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