Stock Name: SUNCITY
Company Name: SUNWAY CITY BHD
Research House: INTER PACIFIC
KUALA LUMPUR: Inter-Pacific Research Sdn Bhd is recommending SUNWAY CITY BHD [] an outperform at RM3.90 with a target price of RM4.70, and said unbilled sales at RM637 million at end-December 2009 indicated the company's property division earnings will remain visible for the next two years.
"Driven by a better contribution from the property segment in 2010, our fair value is pegged at RM4.70, based on a PER of 12 times and EPS of 39 sen.
"Our target price is 28% discount from the estimated RNAV per share of RM6.51. We recommend outperform," it said.
Sunway City had proposed to inject its entire eight investment PROPERTIES [] into 'real estate investment trust' (REIT). The properties included will be (1) Sunway Pyramid shopping mall; (2) Sunway Resort Hotel and Spa; (3) Pyramid Tower Hotel; (4) Menara Sunway; (5) Sunway Hotel Seberang jaya ; (6) Suncity Ipoh Hypermarket; (7) Sunway Carnival Mall and (8) Sunway Tower.
"The offer price is yet to be determined.
"These REITs could be valued around RM3 billion which is about 63.8% of the total investment properties under Sunway City holdings that also includes other assets like Sunway Giza, Sunway University College and Monash University Sunway Campus," said the research house.
Inter-Pacific Research said that in FY09 Sunway City enjoyed a revaluation gain of RM804.9 million from its investment properties. Sunway Pyramid Shopping Mall was revalued to RM2.24 billion, raising their fair value gain by RM680.4 million.
Sunway Carnival Mall was revalued to RM248.5 million, lifting the fair value gain by RM58.5 million. Twenty other investment properties were also revalued to RM847.6 million, which rose the fair value gain to RM66 million, it said.
"The proceeds raised from REIT will be used for the property division, ie for two office towers expected to be launched by end 2010. The first tower with 277,000 sq ft of NLA will be built next to Sunway Resort Hotel & Spa and linked to Sunway Pyramid Mall.
"The second tower with 550,000 sq ft of NLA will be built next to Menara Sunway. SunCity will spend RM400 million to build the towers, which could either be leased or sold via en bloc or injected into REIT," it said.
Company Name: SUNWAY CITY BHD
Research House: INTER PACIFIC
KUALA LUMPUR: Inter-Pacific Research Sdn Bhd is recommending SUNWAY CITY BHD [] an outperform at RM3.90 with a target price of RM4.70, and said unbilled sales at RM637 million at end-December 2009 indicated the company's property division earnings will remain visible for the next two years.
"Driven by a better contribution from the property segment in 2010, our fair value is pegged at RM4.70, based on a PER of 12 times and EPS of 39 sen.
"Our target price is 28% discount from the estimated RNAV per share of RM6.51. We recommend outperform," it said.
Sunway City had proposed to inject its entire eight investment PROPERTIES [] into 'real estate investment trust' (REIT). The properties included will be (1) Sunway Pyramid shopping mall; (2) Sunway Resort Hotel and Spa; (3) Pyramid Tower Hotel; (4) Menara Sunway; (5) Sunway Hotel Seberang jaya ; (6) Suncity Ipoh Hypermarket; (7) Sunway Carnival Mall and (8) Sunway Tower.
"The offer price is yet to be determined.
"These REITs could be valued around RM3 billion which is about 63.8% of the total investment properties under Sunway City holdings that also includes other assets like Sunway Giza, Sunway University College and Monash University Sunway Campus," said the research house.
Inter-Pacific Research said that in FY09 Sunway City enjoyed a revaluation gain of RM804.9 million from its investment properties. Sunway Pyramid Shopping Mall was revalued to RM2.24 billion, raising their fair value gain by RM680.4 million.
Sunway Carnival Mall was revalued to RM248.5 million, lifting the fair value gain by RM58.5 million. Twenty other investment properties were also revalued to RM847.6 million, which rose the fair value gain to RM66 million, it said.
"The proceeds raised from REIT will be used for the property division, ie for two office towers expected to be launched by end 2010. The first tower with 277,000 sq ft of NLA will be built next to Sunway Resort Hotel & Spa and linked to Sunway Pyramid Mall.
"The second tower with 550,000 sq ft of NLA will be built next to Menara Sunway. SunCity will spend RM400 million to build the towers, which could either be leased or sold via en bloc or injected into REIT," it said.
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