Sunway (BUY) - A good year

Stock Name: SUNWAY
Company Name: SUNWAY BERHAD

Research House: HLG

Price Call: BUY

Target Price: 3.20

Sunway (BUY)

A good year

• FY11 posted core earnings of RM325m (25.2 sen/share) beating ours andstreets' estimates by 8% and 7% respectively.
• Results review' 4Q core earnings cameas a positive surprise, growing by 6% QoQ to RM99.3m.
• Red in China'On the other hand, the Group's China operations suffered lossesmainly for its property development in Jiangyin.
• EI' During the quarter, there was atotal EI gain of RM24.5m whereby the majority of it was for +RM30.9mrevaluation gain in property investments and -RM5.3m reversal of taxation.
• Strong Singaporesales' Achieved new property sales of RM784m during the quartercompared to RM454m in 3Q (2Q: RM481m, 1Q: RM403m), bringing YTD newproperty sales to ~RM2.1bn.
• Earnings visibility' Overall, Sunway'soutstanding construction order book stands at ~RM2.3bn, translating to ~1.8xFY11's revenue, while its property unbilled sales of ~RM1.8bn (see Figure #2)translates to 2x FY11's property revenue.
• TP of revised upwards by 2.5% to RM3.20 based on SOP valuation.

Source: HLIB Research 1 March 2012