KUALA LUMPUR (Nov 12): Sunway Bhd’s (KL:SUNWAY) third quarter earnings will likely come in above the consensus estimate, thanks to contribution from its Singapore condominium project, CGS International said on Tuesday.  

Parc Central Residences, which has gross development value of RM2.9 billion of which Sunway’s stake is RM940 million, will provide pre-tax profit of RM123 million in the third quarter, CGS International said in an earnings preview. Sunway is due to announce its results by the end of this month.

“We see earnings upgrades post [Sunway’s] 3Q results release,” CGS International said. Further, its listed subsidiary Sunway Construction Group Bhd (KL:SUNCON) will also see a strong quarter, thanks to data-centre contracts, the house said.

CGS International raised its target price to RM5.20, the highest among 12 research houses covering Sunway, and reiterated its “add” call.

Shares of Sunway have more than doubled so far this year, thanks to strong property sales and as construction activity ramps up with the rollout of major infrastructure projects. Sunway and Sunway Construction have also benefitted from a slew of news on highly-lucrative jobs to build data centres.

There are still eight analysts recommending “buy” calls on Sunway, while three have “hold” and one has the stock on “sell” rating, according to Bloomberg. Sunway’s current share price of RM4.66 has already exceeded the consensus 12-month target price of RM4.47.

CGS International’s latest forecast calls for a net profit of RM924 million, or 16 sen per share for the full-year. That’s 17% above the consensus estimates, which CGS International said is also driven by strong property sales.

Property presales are on track to hit the company’s own target of RM2.6 billion for 2024, CGS International said, noting that 50 units of Sunway Maple Meadow Homes in Iskandar Puteri, Johor, were sold within two hours of launch.

“We continue to like Sunway for its exposure to healthcare”, with the initial public offering (IPO) of its hospital unit set for 2025-2026, the research house added.

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