PETALING JAYA: Sunway Bhd
is planning to spur the development of the 716.3-ha Sunway City Iskandar Puteri (SCIP) township located in the Johor-Singapore Special Economic Zone (SEZ) as the company leverages on SCIP as one of the nine flagship zones of the SEZ.
CGS International Securities, which has maintained an “add” call on Sunway’s stock with a target price of RM5.70 for the shares, expects the company to plan more residential property launches in phases for SCIP to cater for growing demand as the SEZ develops.
The research house said the property developer would be investing more into SCIP over the next five years, including a commercial zone being jointly developed with EqualBase Pte Ltd with the first phase comprising 2.2 million sq ft of logistics warehouse space, a food and beverage hub in Sunway Puteri Hills and an eco-resort, Banjaran Mangrove Resort, similar to its resort near Ipoh, Perak.
“We believe there is some pent-up demand in Iskandar as Sunway Aviana (Phases 1 to 3) was fully sold and Sunway Maple Residence, its first freehold development in Pendas, achieving a 74% take-up as at Dec 24; its latest launch of 44 units was priced higher at RM1.4mil (versus RM1.2mil previously).
Meanwhile, recently launched 504-unit Novo Place executive condo in Singapore achieved 88% take-up (S$1,654 psf) since its launch in November 2024, which should allow Sunway to hit its RM2.6bil financial year ended Dec 31, 2024 (FY24) presales target”.
CGS International views positively the opening of Sunway Medical Centre Damansara, which opened last December, bringing the total number of beds under the company’s healthcare arm, Sunway Healthcare Group (SHG), to 1,400 from 1,240 last September.
It added that SHG would also be accelerating the development of Sunway Medical Centre Iskandar and plans to apply for a hospital license by the first quarter ending Mar 30, 2025 (1Q25), with a possible completion of the hospital in 2029 instead of 2030 as previously shared.
More importantly, it noted that SHG has began the initial public offer process that could be slated for a listing in 4Q25 but with a possible delay to the first-half of 2026. “We believe the nine-month 2024 growth in revenue of 27% year-on-year (y-on-y) and EBITDA of 24% y-on-y will be sustained in 4Q24, with FY24 revenue of RM1.8bil and EBITDA of RM470mil for SHG,” it said.
It added that SHG should be able to counter the effects of the diagnosis-related group system proposed to manage rising healthcare and medical costs through fixed payments versus conventional fees for services due to investments in state-of-the-art equipment that enables doctors to tackle more complex cases that drives the reputation of its hospitals and which also results in increased average fees for patients.
