Sunway Bhd (Jan 4, RM3.00)

Maintain neutral with an unchanged target price (TP) of RM3.20: Sunway Bhd has set its sales target for financial year ending Dec 31, 2016 (FY16) at RM1.4 billion on the back of targeted property launches of RM1.6 billion. Sunway’s property launches for FY16 are well spread across multiple geographic areas such as Sunway Iskandar, Ipoh, Mont’Kiara, Bangi, South Quay and Jalan Peel.

The sales target of RM1.4 billion is 40% higher than its expected sales of RM1 billion for FY15. Management is confident of hitting the expected target of RM1 billion for FY15, and we concur with this as the nine months ended Sept 30, 2015 (9MFY15) sales had already hit RM734 million or 73% of FY15’s full-year target.

Our FY16 sales target is more conservative at RM1.1 billion. Nevertheless, we are keeping our FY16 sales target for Sunway at RM1.1 billion. We reckon that the outlook for the property sector will remain cautious.  We maintain our earnings forecasts for FY15 and FY16 as we make no changes to our new property sales target. — MIDF Research, Jan 4

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This article first appeared in The Edge Financial Daily, on Jan 5, 2016. Subscribe to The Edge Financial Daily here.

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