Sunway Hits a New High, What Should We Focus on Before the Earnings Report?

As a comprehensive enterprise active in many fields, its business covers real estate development, investment, construction, leisure and hotel industry, education, trade and manufacturing, building materials and health care. Recently, in the field of real estate and health care Significant progress has been made.

Sunway’s property arm is expected to exceed its FY24 launch target, especially on the back of the Sunway V3 and Novo Place EC projects in Singapore, with total project launches exceeding RM2 billion. The company's land acquisitions and project launches in Singapore demonstrate its expansion strategy in international markets.

Sunway's real estate investment arm is also expanding aggressively, doubling rental income through new acquisitions and redevelopment projects such as the "Oasis" precinct at Sunway Pyramid.

As the largest private hospital in Southeast Asia, Sunway Medical Center Sunway City (SMCKL) has the potential to become a regional medical tourism center. SMCKL plans to expand its bed capacity from 724 to 1,086, which is expected to significantly grow its international patient base, thereby approaching the revenue level of Bumrungrad Hospital in Thailand. This expansion is expected to significantly enhance SMCKL's revenue potential.

In addition, Sunway has begun preparations for the listing of Sunway Healthcare Group, which may raise RM3.5 billion in 2025, becoming the largest IPO on the Malaysian stock market in seven years.

According to analysis by Hong Leong Investment Bank, Sunway's financial performance is solid and is expected to continue to grow in the coming years. Core earnings per share (EPS) is expected to increase from 11.4 sen in FY23 to 15.0 sen in FY25, showing the company's strengthening profitability. At the same time, the price-to-earnings ratio (P/E) is expected to decrease from 40.7 times to 30.9 times, reflecting the market's recognition of Sunway's future growth potential.

Analysts at Hong Leong Investment Bank said they maintained their “buy” rating on Sunway, based on their optimistic outlook for the company’s future growth potential, and raised their target share price to RM5.45 from RM5.15. The dividend yield is 1.5%.

The company's diversified business structure and extensive presence in Southeast Asia provide it with robust risk resistance. Sunway's growth momentum comes from its continued expansion in its three pillars of healthcare, real estate development and construction.

Although Sunway's prospects are generally positive, there are still certain challenges in the company's development based on the fluctuations in the real estate market and fierce competition in the healthcare industry.