RHB has maintained a Buy recommendation for Sunway Group Bhd with the price RM2.06, with a 22% upside.
It said that it believes that the market should view Sunway’s 2022 business plans positively due to well thought out business strategy.
It said that having partially recovered from the pandemic, besides emphasising the importance of growth (ie construction plans for hospitals/integrated wellness hubs and property launches), it is also taking the opportunity to strengthen company culture and quality by instilling the ESG element across its developments and various businesses.
RHB said that Sunway achieved MYR2.55billionn worth of property sales in 2021 (vs MYR1.3billion in 2020), exceeding its revised sales target of MYR2.2billion. Projects in Singapore were the main contributor, making up 60-70% of total sales.
RHB said that Sunway has set a lower sales target for 2022, and we believe it is mainly due to the cautious sentiment in Singapore following the recent implementation of stringent cooling measures by the Government that was announced in mid-Dec 2021.
It said that this also reflected by the company’s launch plan, whereby only one Singapore project (Flynn Park in Pasir Panjang with a GDV of MYR676m) will be rolled out in 2H22. 70% of the launches will be in Malaysia, and key projects include Jernih Residence in Kajang (GDV: MYR281m), Sunway Bukit Jalil (MYR275m), Sunway Alishan in Cheras (MYR261m). Given the success of Sunway Belfield, these mid-range highrise projects should also be well received as the development concept and model will likely be replicated (with slight modifications) for other locations
