Sunway Bhd is in for a sustained good run having gained 50% in the past year. It touched a multi-year high of RM2.43 before closing at RM2.40 on Jan 15. The counter was trading at a low of RM1.52 last June.

Technical analysts are expecting the counter to surge further to a near-term resistance level of RM2.50, followed by RM2.70 having gone past the RM2.25 level. That’s quite a good potential upside and should not be hard to reach given its strong fundamentals.

Investors should be excited about the rejuvenated recovery of job flows in the first half this year. That’s thanks to a more stable government and improving operating margins.

Analysts like Sunway’s construction arm, Sunway Construction potential job wins from the finalisation of the Vietnam coal-fired power plant. There is also the construction of warehouses and data centres as well as internal building jobs from companies within Sunway group, especially medical centres.

What’s probably more interesting about Sunway is the likely windfall from the listing of Sunway Healthcare Group’s (SHG), which is said to be worth some RM9 billion.

In fact, RHB Research has advised investors to start buying Sunway shares as the listing exercise should transpire earlier than the October 2027 target. Once the listing draws near, shareholders of Sunway are expected to be rewarded via a value-unlocking exercise.

Recall the listing of Sunway Construction Group Bhd (SCGB) eight years ago, whereby Sunway shareholders were given 1-for-10 distribution in specie of free SCGB shares.

Not only that, after SCGB listing, shareholders also received a 26 sen special dividend. Surely, as the major shareholder of the healthcare group post listing, Sunway would benefit from any value unlocking exercise.

RHB Research is rather bullish on the counter, revising its target price to RM3 from RM2.65, representing a 35% upside and 3% yield. The research house pointed out that its newer hospitals especially Sunway Medical Centre Seberang Jaya has performed better than expected.

The hospital’s earnings before interest, tax, depreciation and amortisation (EBITDA) has already turned positive since 2Q23 considering that it only opened in Nov 2022. The research house expected the hospital to start turning profitable at the pretax profit level in the second half this year.

RHB Research pointed out that Sunway’s other divisions are significantly undervalued as the investment properties not currently owned by Sunway REIT.

The research house pointed out that Sunway owns strategic landbank such as the parcel at Velocity, South Quay, as well as 1,770 acres in Iskandar Malaysia just off the Tuas link.

It added that Sunway’s landbank is deemed a jewel given the catalytic developments and the upcoming establishment of Johor-Singapore special economic zone. Although the expected listing of SHG may not be anytime soon, there are more than enough catalysts to boost the share price further in the near term.

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Here are the setup based on Daily Chart:

1. Continuation of trend after reaccumulation

2. Trading far from 20MA, expect pullback