Sunsuria Berhad (Sunsuria) started FY24 with 1Q net profit of RM1.7m (+57.7% YoY, +38.0% QoQ) mainly due to higher billings from its on-going residential projects of Tower A, D, and E of Bangsar Hill Park, along with the integrated mixed development of Sunsuria Forum 2 in Setia Alam. The Group’s 1QFY24 performance lags our expectations as the contribution from its subsidiary, i.e. Bangsar Hill Park Sdn Bhd (51%-owned currently but to be raised to 84% by 1HCY24) came in higher than expected, with its minority interests therefore rising more than 6x to RM6.4m. As such we revise our billing assumptions and cut FY24/FY25/FY26 earnings estimates by 45%/18%/18%. Elsewhere, the Group sold about RM114.3m of properties in 1QFY24 driven by contribution from completed projects, ongoing developments, and new launches. It launched Talisa, the second phase of its Bangsar Hill Park with development commencing recently. Unbilled sales as of 31 December 2023 reached RM889.5m. All told, we maintain our Neutral call and TP of RM0.55, at a discount of c.0.5x to book value, pegged on par with sector average currently.

• 1QFY24 revenue rose 74% YoY to RM137.3m primarily driven by billings fromits on- going residential projects of Tower A, D, and E of Bangsar Hill Park,along with the integrated mixed development of Sunsuria Forum 2 in SetiaAlam. We understand that new projects launched last year, such as SeniResidences at Sunsuria City and Sunsuria Kejora Business Park (Phase 1), asemi-detached industrial development in Puncak Alam, have also contributedto the revenue growth during the quarter. Correspondingly, Group pre-tax profitrose 3x to RM13.8m but the net profit attributable to owners of the Companyimproved to RM1.6m only from RM1.1m previously due to the higher profitattributable to minority interest as the Bangsar Hill Park project is carried out bya 51%-held subsidiary.

• Remaining total GDV of RM8bn. Sunsuria currently has c.2,052 acres ofundeveloped landbank with potential gross development value (GDV) ofRM8bn which we estimate could take at least 8-10 years to develop. AboutRM6bn GDV is mainly from Sunsuria City @ Salak Tinggi which has alreadycompleted projects with combined GDV of RM1.4bn to-date. On-goingresidential development projects, among others, include Tower A, D and E ofBangsar Hill Park, Seni Residences and multi-facility serviced apartmentTangerine Suites at Sunsuria City township and integrated mixed developmentForum 2 at Setia Alam. Bangsar Hill Park Development Sdn Bhd unveiledTalisa, the second phase of its Bangsar Hill Park development recently. Thecompany held an official preview of the project back in July last year and weunderstand that it has received more than 2,000 registrations. Talisa has a GDVof RM1.1bn and comprises 802 units across two blocks (Blocks B and C). BlockB is a 57-storey tower with 410 units while Block C is a 55-storey tower with 392units.

Source: PublicInvest Research - 27 Feb 2024