RAM Ratings has assigned initial corporate credit ratings of AA1/Stable/P1 to Sunway Bhd, supported by the conglomerate’s established positions across property development, construction, property investment and healthcare, as well as strong medium- to long-term earnings visibility.
The rating agency said Sunway’s extensive vertical integration across its core property value chain supports a resilient business model and provides greater earnings stability relative to peers.
These strengths, however, are tempered by modest debt coverage metrics stemming from the sizeable debt accumulated to finance the group’s expansion.
Sunway had RM8.3 billion of unbilled property sales and an outstanding RM10.5 billion construction order book as at August 2026, providing a substantial pipeline of future revenue.
RAM said earnings visibility is further supported by healthy property take-up rates and steady execution of ongoing developments.
Longer-term growth is underpinned by Sunway’s 2,338-acre landbank with an estimated gross development value of RM87.7 billion, alongside an active construction tender book of RM14.2 billion.
Healthcare is also expected to become an increasingly important earnings contributor as Sunway expands capacity and newer hospitals progressively ramp up operations.
RAM also viewed positively Sunway’s track record of incubating, scaling and monetising businesses through established platforms such as Sunway REIT, Sunway Construction Group Bhd and Sunway Healthcare Holdings Bhd.
The group’s major expansion initiatives are largely self-financed at the operating division level, which RAM said reduces funding concentration and refinancing pressure at the holding company.
Financial flexibility is further supported by a sizeable pool of unencumbered assets and RM1.2 billion in committed undrawn funding facilities as at end-December 2025.
Despite recent deleveraging following the listing of Sunway Healthcare Holdings Bhd, RAM said debt coverage remains the principal constraint on the group’s ratings.
Based on FY2025 figures, net debt-based funds from operations (FFO) and operating cash flow (OCF) debt coverage stood at 0.24 times and 0.32 times, respectively, supported by Sunway’s sizeable cash holdings.
RAM projects gross FFO and OCF debt coverage to range between 0.11 times and 0.16 times from FY2026 to FY2028, based on an estimated peak debt load of RM18 billion.
Corresponding net-debt coverage ratios are projected at between 0.19 times and 0.28 times over the same period.
Nevertheless, RAM said its assessment takes into consideration the quality and stability of Sunway’s earnings across its diversified asset base, alongside management’s established track record of executing growth initiatives.
