Company Name: SUNWAY BERHAD
| Research House: HLG | Price Call: BUY | Target Price: 3.12 |
Sunway (BUY)
Expecting a better 2H results
'''' Sunway will be releasing their 3Q results on the 24th Nov (Thu) and we are expecting stronger 2H11 numbers. Hence, the coming 3Q and 4Q results should accelerate, bringing it closer to our full year estimate of RM300m. It is important to note that the consensus estimates are slightly above our estimate by 4%.
'''' After our recent chat with the management, we are encouraged by the sales progress of Sunway's new flagship development Velocity and Nexis. In Singapore, the latest launch for Acr At Tampines has achieved a take-up rate of 63% in a short period of time after launching in Sep'11. Meanwhile, both Vacanza@East and Miltonia Close have achieved a take-up rate of 79%.
'''' Overall, Sunway's outstanding construction order book stands at ~RM2.7bn, translating to ~2.5x FY10's revenue, while its property unbilled sales of ~RM1.7bn translates to 3.1x FY10's property revenue.
'''' We maintain a BUY call on Sunway with a TP of RM3.12 based on SOP valuation.
''
BNM MPC Statement 6/2011
'''' The MPC maintained the OPR at 3.00%, in line our expectation and was predicted by all economists.''
'''' The tone of the MPC Statement is quite similar to the previous one in September, implying that macro conditions and outlook have remained relatively unchanged.
'''' The MPC acknowledged for the second time growth moderation in the advanced economies that could pose downside risks to regional economies
'''' The MPC expected 3Q GDP to have improved on stronger domestic demand but weaker external environment could impact the near-term growth prospects.
'''' We expect BNM to lean towards growth agenda given the recent external developments while inflation is on moderation trend. We see BNM holding the OPR steady at 3.00% until end-2012.
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KLCI: More range bound trading this week
'''' Technically, daily trend and momentum indicators are pointing to more consolidations as the KLCI fell below the 10-d SMA (now at 1477 pts) and is unable to break the 100-d SMA (now at 1489) and 1500 psychological levels over the last two weeks. However, more positive readings on the weekly slow Stochastics and MACD should support further upside in the medium term. Thus, any downside consolidation will be mild and well-supported by recent Nov's low of 1452 pts and 30-d SMA (1439 pts).
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Proton: Grossly Oversold
'''' Looking at the charts, there is a high possibility that price may swing towards the 100-d SMA (RM2.89) and RM3.00 psychological levels amid strengthening technical readings. Further breakout from RM3.00 will spur prices higher towards formidable resistance of 200-d SMA (now at RM3.20). Immediate supports are RM2.57-2.64.'' Cut loss below RM2.55.
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