Sunway announced that it was awarded an MYR1.6bn construction contract. We maintain our BUY rating but with an unchanged MYR3.86TP (11% upside). With this latest contract, total outstanding orderbook is boosted to MYR4.3bn, sufficient to underpin its construction unit’s earnings over the next two to three years. Meanwhile, investors should be mindful of the upcoming special cash dividend, which has a 2 Oct entitlement date.

Bagged MYR1.6bn Parcel F contract. Sunway has finally secured the MYR1.6bn Parcel F Complex contract from Putrajaya Bina SB. This is a long -awaited contract since last year, given the size of the contract value. The job involves the design, construction and completion of 10 government office buildings, one block of shared facilities, podium parking and external works in Precinct 1 at Putrajaya. It will take 34 months to be completed from date of site possession (18 Sep 2015).

MYR4.3bn construction orderbook now. With this award, Sunway’s construction orderbook is now boosted to MYR4.3bn, of which, internal works make up 28% of the total (or MYR1.18bn). The strong outstanding orderbook is sufficient to boost Sunway’s 54%-owned Sunway Construction’s (SCGB MK, NR) earnings visibility over the next two years.

Reminder – 26 sen special cash dividend next month. To reiterate, the entitlement date of the special cash dividend is on 2 Oct 2015, andpayment date will be on 16 Oct 2015.

Forecasts and risks. We make no changes to our earnings estimates. Key risks to our forecasts include: i) weaker-than-expected property sales, and ii) drastic economic slowdown.

Maintain BUY. With our earnings forecasts unchanged, we maintain our BUY rating on the stock. Our TP is kept at MYR3.86, based on a 30% discount to RNAV plus a 26 sen dividend. Ex-dividend, our TP will be adjusted to MYR3.60.