KUALA LUMPUR (May 13): Shares of Sunway Bhd advanced at mid-morning today after CIMB Research maintained its Add rating on Sunway at RM3.40 with a higher target price of RM4.04 (from RM4) and advised investors to accumulate as the stock continued to offer longer-term value via its land bank.

At 10.27am, Sunway was up 1.17% or four sen to RM3.46 with 373,100 shares traded.

In a note yesterday, CIMB Research said Sunway's deal to acquire a 17-acre piece of land in Kelana Jaya was a positive surprise and it viewed the RM386 psf (RM286m) price tag as fair given its urban location, proximity to major highways and the new BRT line.

“First launch is targeted for 2H16, suggesting full-year earnings contribution only from 2017 onwards.

“Hence, we keep our EPS forecasts at this juncture. Based on a 20% pretax margin, we estimate that this venture will contribute RM40 million (6%) to FY17 net profit.

“We raise our RNAV-based target price as we factor in the new land (unchanged 20% RNAV discount) and maintain our Add call. This land purchase and construction job wins are potential catalysts,” it said.