Review

• Stripping off the exceptional items amounting to RM96.0mn, Sunway’s 1H24 core net profit of RM346.7mn (+18% YoY) came in within expectations, accounting for 44% and 43% of ours and consensus’ full-year forecasts, respectively.

• A first interim dividend of 2.0sen/share was declared, matching the amount declared in the corresponding period last year.

• YoY: In 1H24, revenue grew by 10% YoY to RM3.0bn, fuelled by stronger performance across all business segments. Core PBT increased by 19%, in line with the revenue growth. Notably, the property development segment achieved a 51% rise in PBT, thanks to higher sales and progress billings. Similarly, the property investment division saw a 23% increase in core PBT, driven by higher visitor numbers at theme parks, improved hotel occupancy rates, and increased revenue from investment assets. Additionally, the healthcare division's PBT rose by 30%, supported by improved operational results from its hospitals, increased licensed bed capacity, and better census performance compared to the previous period.

• QoQ: In 2Q24, revenue increased by 11%, driven by higher contributions from most business segments, though the property investment segment saw a marginal decline. Despite this, core net profit grew by only 1.3% QoQ to RM174.5mn, mainly due to lower margins in the property investment division, higher tax expenses, and increased minority interests.

• Sunway’s 2Q24 property sales decreased 23% YoY but increased 55% QoQ to RM771mn. This brought the YTD 1H24 property sales to RM1.3bn, representing a 15% YoY decline. The Klang Valley region contributed 53% of total sales – see Figure 1.

Source: TA Research - 29 Aug 2024