Sunway Bhd (+ve)
Sunway (Fundamental: 1.5/3, Valuation: 1.8/3) was last picked by our momentum algorithm on Nov 27, 2014. Since then, its share price has risen 13.8% to close at RM3.88 yesterday.
The company is in the process of listing its construction arm, Sunway Construction Group (SCG), by July 2015. Existing Sunway shareholders will get 1 share in SCG for every 10 shares held (ex-entitlement on May 6). The indicative offer price for SCG is RM1.10, valuing it at RM1.42 billion or 12.5 times historical P/E. At end-2014, SCG has outstanding orderbook of RM3.1 billion or 1.75 times total sales in 2014.
Sunway will also distribute part of the proceeds from listing to shareholders in the form of a special dividend, estimated at 22-25 sen per share.
Sunway, one of Malaysia’s largest property and construction companies, has a total landbank of 3,376 acres with potential GDV of RM50 billion. Unbilled sales stood at RM2.5 billion at end-2014.
This article first appeared in The Edge Financial Daily, on April 29, 2015.