Is Sunway Berhad's performance breaking new profit highs?!

Jaspherlim_my wrote a column · Nov 26, 2024 21:19

$SUNWAY (5211.MY)$ Performance profit hits a new high, but the stock price has already taken off ... It seems like everyone in the recent market has been quite savvy. 😅

As a diversified group, Sunway Berhad covers various sectors including real estate development, construction, medical, hotels, and quarrying. It has shown strong growth in multiple sectors, especially in real estate development and construction.

Real estate development is one of Sunway's core revenue sources, with a 60.1% revenue growth reported in this financial statement, mainly due to progress in the Singapore projects and sales of local projects in Malaysia. This sector is like a cash cow for the company, stable and solid.
The construction business, operated through its subsidiary SunCon, has performed remarkably well with a 44% revenue growth. Particularly, the accelerated progress in datacenter projects, which are high-demand infrastructure, will continue to be a revenue backbone. This financial statement was released last week...
The medical sector contributed 63 million ringgit in net income this quarter, an increase of 41.8%. The increase in bed occupancy rates and the expansion of medical services have shown me the potential of Sunway in the medical field, and I am looking forward to its medical sector IPO in about 1-2 years.
Although revenue from the quarrying and manufacturing business declined by 5.5%, with cost optimization, the profit still increased by 22.7%. This indicates that Sunway's management efficiency is good, and it can maintain profitability even in challenging times.

Overall, Sunway's revenue this quarter reached 2.029 billion Ringgit, a 31.8% year-on-year growth driven mainly by real estate and construction business. Net income reached nearly 0.408 billion Ringgit, exceeding expectations. However, there are cost pressures to note as operational and financing costs rise, especially in the medical sector with depreciation and capital expenditure. Forex fluctuation risks need attention due to Sunway's involvement in overseas operations.

Undoubtedly, Sunway is a company with a solid foundation, where real estate development forms its stable base and construction and healthcare are the main growth drivers for the future. The strong demand for data centers and the continuous expansion of the medical sector will enhance its long-term development potential. However, the costs from expansion and forex risks need close monitoring.

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