Sunway up 3% after Insider Asia says fundamentals, valuations attractive

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KUALA LUMPUR (Nov 13): Sunway Bhd soared as much as 10 sen or 3.15% to RM3.27 after a report by Insider Asia noted that the company’s fundamentals and valuations were attractive.

At 9:28am, construction and property firm Sunway pared gains to RM3.24.

Insider Asia said with Singapore government investment arm GIC Pte Ltd ceasing to be a substantial shareholder in Sunway last week, investors could refocus on Sunway's fundamentals and valuations, which appeared attractive.

"Sunway’s shares are trading at a trailing 12-month P/E ratio (price-earnings ratio) of 3.6 times and a price-to-book ratio of 0.98 time. Excluding revaluation gains, normalised P/E is 10.8 times.

“Sunway is one of Malaysia’s largest property and construction conglomerates with a solid track record and excellent reputation,” Insider Asia said.

Bloomberg data showed that Sunway's P/E ratio compared with the sector's average of 19 times.

Insider Asia's report is published in The Edge Financial Daily and today.

According to Insider Asia, Sunway has a total landbank of 1,350 ha (3,376 acres) with potential gross development value of RM50 billion.

Unbilled sales stood at RM2.4 billion at end-June 2014. Insider Asia noted that Sunway was poised to replicate the success story of its Sunway Resort City concept in Iskandar Malaysia, Johor.

Insider Asia said the planned listing of Sunway's construction arm Sunway Construction Sdn Bhd was timely. This is because Sunway Construction is on track to benefit from the Malaysia's major infrastructure spending.

Sunway Construction has clinched a RM1.17 billion contract for the first phase of the Mass Rapid Transit project. Insider Asia said Sunway Construction stood a good chance of securing more jobs for the second phase.