Sunway Bhd - Eyeing KGNS land for redevelopment? HOLD

Stock Name: SUNWAY
Company Name: SUNWAY BERHAD

Research House: AMMB

Price Call: HOLD

Target Price: 2.85

- It has been reported in the press that Tan Sri SyedMokhtar ' via his private entity ' and Sunway Bhd have submitted a proposal toredevelop Kelab Golf Negara Subang (KGNS) with a commercial value ofRM5bil. 

- The golf club, which was opened in 1968, boasts a landsize of 330 acres, which sit squarely in the middle of established anddeveloped areas of Subang Jaya, Kelana Jaya, Ara Damansara and BandarSunway. 

- The prime land is owned by the government and is currentlyhalfway through its 99-year lease.

- This is not something new as there have been rumours inthe market that the government is looking at reclaiming control of this land,with a view to liquidate this prime land to developers. This of course has beenopposed strongly by members, as many view the club ' which was initiated byTunku Abdul Rahman ' as an iconic institution and its members are mostly madeup of ex-top civil servants.

- Given the circumstances, we are of the view that it wouldbe a massive challenge for the interested parties to get hold of this primeland.

- Similarly, it is believed Sime Darby's proposal toredevelop Kelab Golf Perkhidmatan Awam (KGPA) ' which also sits on a prime landwithin Damansara/Petaling Jaya '  forhigh-end residential units has been met with strong opposition.

- This just shows the lack of prime land for development inthe market and this will continue to drive strong land prices goingforward. 

- We maintain our HOLD rating on Sunway with our fair valueunchanged at RM2.85/share

Source: AmeSecurities