STOCK FOCUS OF THE DAY
Sunway Construction : Poised to surpass FY17 target for job wins BUY
We upgrade Sunway Construction (SunCon) from HOLD to BUY, raise our FY17-19F net profit forecasts by 1%, 29% and 29%, and increase our FV by 29% to RM2.60 from RM2.01 previously. This follows an upward revision in our assumption for new job wins in FY17 to RM3.5bil (from RM2.5bil previously), while keeping our new order book replenishment assumption of RM2bil annually in FY18-19F. Our FV is based on 15x revised FY18F EPS, in line with our benchmark forward PE of 14-16x for large-cap listed construction companies.
We came away from a recent visit to the company feeling more upbeat on the company’s prospects. SunCon appeared confident that its FY17 job wins will surpass its initial target of RM2bil by a huge margin. YTD, SunCon has secured new jobs worth RM1.6bil, including the RM582mil government servant housing project PP1AM to build 2,160 units of apartments in Kota Bharu secured yesterday. SunCon is particularly bullish in the rail-related space, as well as internal projects from parent Sunway Bhd.
Others :
Eco World Development : No surprises BUY
Astro Malaysia : Disciplined cost rationalisation pays off HOLD
STOCK ON RADAR
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ECONOMIC HIGHLIGHT
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