Sunsuria Berhad’s (Sunsuria) 3QFY23 net profit came in at RM6.8m (+62.2% YoY, +>100% QoQ) which came in ahead of our expectations. YTD, Group 9MFY23 net profit of RM12.7m (-12.5% YoY) constituted about 86% of our full year estimates as billings and margins improved stronger than expected. As such, we lift our FY23-25 earnings estimates upwards by +46%/+42%/+5% to factor in changes to billings and margins assumptions. As at 3QFY23, Group unbilled sales stood at RM983.3m. So far, the Group has launched two new projects i.e. Seni Residences at Sunsuria City and Sunsuria Kejora Business Park (Phase 1), a semi-detached industrial development in Puncak Alam. We understand that it is looking to unveil Talisa, the second phase of its Bangsar Hill Park development by the end of the year. All told, we maintain our Neutral call and RM0.40 TP, based on a 0.4x to price-to-book ratio (PBR), which is pegged at sector average.

• 9MFY23 revenue rose 9.7% YoY to RM331.8m, mainly due to faster construction work progress from on-going projects and newly launched projects. The Group’s revenue was also lifted by sale of completed inventories including Monet Garden and Giverny Walk at Sunsuria City, as well as Sunsuria Forum (Phase 1) in Setia Alam. Correspondingly, Group PBT for 9M FY23 rose 28.1% YoY to RM31.9m. However, net profit attributable to owners came in lower at RM12.7m (as compared to RM14.5m a year ago). Separately, the construction of the Group’s Concord College International School (collaboration with Concord College International Ltd and Concord College, UK) is progressing according to plan and targeted to complete by December 2023.

• Remaining total GDV of RM8bn. Sunsuria currently has c.2052 acres of undeveloped landbank with potential gross development value (GDV) of RM8bn which we estimate could take at least 8-10 years to develop. About RM6bn GDV is mainly from Sunsuria City @ Salak Tinggi which has already completed projects with combined GDV of RM1.4bn to-date. On-going residential development projects, among others, include Tower A, D and E of Bangsar Hill Park, Seni Residences and multi-facility serviced apartment Tangerine Suites at Sunsuria City township and integrated mixed development Forum 2 at Setia Alam. We understand that its subsidiary, Bangsar Hill Park Development Sdn Bhd will unveil Talisa, the second phase of its Bangsar Hill Park development by end of the year. The company held an official preview of the project back in July and we understand that it has received more than 2,000 registrations. Talisa has a GDV of RM1.1bn and comprises 802 units across two blocks (Blocks B and C). Block B is a 57-storey tower with 410 units while Block C is a 55-storey tower with 392 units.

Source: PublicInvest Research - 28 Aug 2023