Analysts Revise Sunway's FY2025-2026 Earnings Forecast Upward On Positive Outlook
KUALA LUMPUR, Feb 27 (Bernama) -- Analysts have revised their earnings forecast for Sunway Bhd for the financial year 2025-2026 (FY2025-FY2026) upward, maintaining their ‘buy’ and ‘underperform’ calls on the company.
In a note today, Hong Leong Investment Bank Bhd (HLIBB) said it increased Sunway’s FY2025/2026 forecasts by 7.2 per cent and 6.7 per cent, respectively, primarily due to higher assumptions for property development launches and sales.
The investment bank maintained a ’buy’ recommendation on the stock, with a slightly lower target price (TP) of RM5.70 (from RM5.75) based on sum of parts valuation, factoring in revised TP from Sunway Construction Group Bhd (revised lower) and Sunway Real Estate Investment Trust (revised higher).
“With the group’s widening exposure in the Malaysian economy, the stock provides a good proxy to the domestic economy which is currently entering a new phase of growth.
“In an environment of heightened geopolitical uncertainty and potential policy risks, particularly with the upcoming changes under the United States President Donald Trump’s administration, Sunway’s predominantly domestic-focused business model stands out in its investment appeal, given that it is less exposed to this risk,” it said.
RHB Investment Bank Bhd also raised its FY2025 and FY2026 earnings forecast for Sunway by 13 per cent and 15 per cent, respectively, considering Sunway management’s plan to ramp up launches in Iskandar Malaysia and construction orderbook replenishment.
It said Sunway's unbilled sales and outstanding construction orderbook stood at RM3.33 billion and RM5.83 billion in the fourth quarter of 2024 (4Q 2024), compared to RM4.5 billion and RM7.07 billion in 3Q 2024.
“Sunway’s 4Q 2024 results exceeded estimates, being mainly driven by the property development and construction units, while full-year property sales of RM3.01 billion surpassed management’s target of RM2.6 billion.
“For FY2025, Sunway plans to roll out RM1.26 billion worth of properties in Sunway City Iskandar Puteri and Johor Bahru, reaffirming its confidence in the Iskandar Malaysia property market,” it said in a separate note.
Therefore, RHB Investment Bank kept its ‘buy’ call on the counter, with a TP of RM5.77.
Mewnwhile, Kenanga Investment Bank Bhd raised its FY2025 earnings forecast on Sunway by 16 per cent, driven by stronger sales in the healthcare and construction segments.
The investment bank said it believes Sunway will stay in the spotlight from the upbeat sentiment in the property development sector and the upcoming spin-off of its healthcare unit.
“We maintain our TP of RM3.35 and our ‘underperform’ call as current valuations still appear pricey,” it said in a note today.
-- BERNAMA