This article first appeared in The Edge Financial Daily, on September 23, 2015.
Sunway Construction Group Bhd
(Sept 22, RM1.17)
Upgrade to buy with a revised target price (TP) of RM1.32 from RM1.14: The government is expected to prioritise transport-led initiatives under the ambit of the National Key Results Area.
The objective is to solve the urban transport woes by connecting all forms of urban transport network in a coherent transit-commute grid. Hence, the planned Bus Rapid Transit (BRT) projects are slated to be rolled out expeditiously.
Sunway Construction is equipped with core competencies from its technical experiences of building the Sunway BRT Corridor with full compliance of international specifications, and turnkey design and build of structures with specific technical standards. Together, these elements could substantially uplift its potential of winning project awards.
We upgrade our recommendation to “buy” with a revised TP based on sum-of-parts valuation and implied price-earnings ratio (PER) of 16 times of financial year 2016 . — MIDF Research, Sept 22