Sunway’s hospitality and leisure segment outlook remains muted
KUCHING: Sunway Bhd’s (Sunway) outlook for its hospitality and leisure segment remains muted due to Covid-19 pandemic, analysts observed, despite their optimism on its fourth quarter of the financial year 2020 (4QFY20) performance.
In a report, the research team at MIDF Amanah Investment Bank Bhd (MIDF Research) said it maintained its ‘neutral’ call on Sunway due to limited upside while outlook for its hospitality and leisure segment remains muted due to Covid-19 pandemic.
Nevertheless, it expected Sunway’s earnings to be stronger in 4QFY20 due to anticipated stronger earnings from property development division.
“Earnings of property development division in 4QFY20 is expected to boost by bumper earnings recognition of Rivercove Residences project in Singapore and Sunway Gardens project in China as handover of the projects are expected in 4QFY20,” it explained.
It noted that Sunway recorded total new sales of RM1.3 billion for FY20, exceeding expectations.
“The better-than-expected sales in FY20 were mainly due to sequentially higher new sales of circa RM360 million in 4QFY20. Meanwhile, new sales of RM1.3 billion in FY20 were lower than new sales of RM1.55 billion achieved in FY19, mainly due to low property sales during MCO period,” it said.
Looking ahead, Sunway’s management set higher new sales target of RM1.6 billion for FY21 on the back of planned launches with total gross development value ( GDV) of RM2.8 billion. Key launches for FY21 include overseas projects namely Parc Central Residences (GDV: RM910 million) in Singapore and Sunway Gardens Phase 3 (GDV: RM780 million) in China.
Local projects that will be launched in FY21 include Sunway Belfield Phase 1 (GDV: RM320 million) in Jalan Belfield KL, Sunway ARTESSA ( GDV: RM300 million) in Wangsa Maju KL, Sunway Damansara Hill (GDV: RM220 million) in Kota Damansara KL and Sunway Kajang Phase 1 ( GDV: RM270 million) in Kajang Selangor.