MIDF RESEARCH is a unit of MIDF AMANAH INVESTMENT BANK Kindly refer to the last page of this publication for important disclosures 20 December 2016 | Corporate Update Sunway Berhad Maintain NEUTRAL Site visit to Sunway Velocity Mall in Cheras Unchanged Target Price (TP): RM3.25 INVESTMENT HIGHLIGHTS • Site visit to Sunway Velocity Mall in Cheras • High occupancy rates despite oversupply concerns • Velocity Hotel and Velocity Medical Centre under construction • Maintain NEUTRAL with an unchanged TP of RM3.25 Site visit to Sunway Velocity Mall in Cheras. We had a site visit to Sunway Velocity Mall in Cheras recently following the opening of the mall on 8 th December 2016. Sunway Velocity Mall is part of Sunway Velocity project that spanned across 23 acres of land in Cheras. Sunway Velocity is a vibrant integrated development, which comprises office and retail projects, residential projects, Sunway Velocity Hotel, and Sunway Velocity Medical Centre. Sunway Velocity is located 4km away from KL City Centre and with direct link to two upcoming underground MRT stations. High occupancy rates despite oversupply concerns. Sunway Velocity Mall is having net lettable area (NLA) of 880k square feet while secured occupancy rate stood at 90%. We gather that anchor and mini anchor tenants of the mall include Parkson, TGV, AEON Max Value, Grand Imperial, and Harvey Norman. We were pleasantly surprise by the high occupancy rate of the mall given concerns about oversupply of retail spaces in Cheras where the upcoming MyTOWN Shopping Centre with NLA of 1.1m square feet is 1.5km away from Sunway Velocity. We believe Sunway Velocity Mall should continue enjoy high occupancy rates going forward given the expertise of Sunway Berhad in managing shopping malls and good connectivity of Sunway Velocity. Velocity Hotel and Velocity Medical Centre under construction. On other projects in Sunway Velocity, we gather that Sunway Velocity Hotel, which is a 4-star business hotel, is under construction and due for opening by 2H2017. On the other hand, Sunway Velocity Medical Centre with 240 beds is currently under construction with targeted opening in 4Q2018. Maintain Neutral with an unchanged TP of RM3.25. We maintain our earnings forecast for FY16-17 as we had already inputted the earnings contribution from Sunway Velocity mall to our earnings forecast. We also maintain our TP for Sunway at RM3.25, based on Sum-of-Parts valuation. We are keeping our Neutral stance on Sunway due to overall subdued property market outlook. RETURN STATS Price (19 Dec 2016) RM3.04 Target Price RM3.25 Expected Share Price Return 6.9% Expected Dividend Yield 3.6% Expected Total Return 10.5% STOCK INFO KLCI 1,634.30 Bursa / Bloomberg 5211 / SWB MK Board / Sector Main / Properties Syariah Compliant Yes Issued shares (mil) 2,061.7 Par Value (RM) 1.00 Market cap. (RM’m) 6,160.77 Price over NA 0.83 52-wk price Range RM2.87 - RM3.24 Beta (against KLCI) 0.48 3-mth Avg Daily Vol 1.20m 3-mth Avg Daily Value RM3.65m Major Shareholders Sungei Way Corp 56.43% EPF 6.00% Cheah Fook Ling Skim 4.58% Amanah Saham Msia 2.55%
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MIDF RESEARCH is a unit of MIDF AMANAH INVESTMENT BANK
Kindly refer to the last page of this publication for important disclosures
20 December 2016 | Corporate Update
Sunway Berhad Maintain NEUTRAL
Site visit to Sunway Velocity Mall in Cheras Unchanged Target Price (TP): RM3.25
INVESTMENT HIGHLIGHTS
• Site visit to Sunway Velocity Mall in Cheras
• High occupancy rates despite oversupply concerns
• Velocity Hotel and Velocity Medical Centre under construction
• Maintain NEUTRAL with an unchanged TP of RM3.25
Site visit to Sunway Velocity Mall in Cheras. We had a site visit to
Sunway Velocity Mall in Cheras recently following the opening of the mall on
8th December 2016. Sunway Velocity Mall is part of Sunway Velocity project
that spanned across 23 acres of land in Cheras. Sunway Velocity is a vibrant
integrated development, which comprises office and retail projects, residential
projects, Sunway Velocity Hotel, and Sunway Velocity Medical Centre. Sunway
Velocity is located 4km away from KL City Centre and with direct link to two
upcoming underground MRT stations.
High occupancy rates despite oversupply concerns. Sunway Velocity
Mall is having net lettable area (NLA) of 880k square feet while secured
occupancy rate stood at 90%. We gather that anchor and mini anchor
tenants of the mall include Parkson, TGV, AEON Max Value, Grand Imperial,
and Harvey Norman. We were pleasantly surprise by the high occupancy rate
of the mall given concerns about oversupply of retail spaces in Cheras where
the upcoming MyTOWN Shopping Centre with NLA of 1.1m square feet is
1.5km away from Sunway Velocity. We believe Sunway Velocity Mall should
continue enjoy high occupancy rates going forward given the expertise of
Sunway Berhad in managing shopping malls and good connectivity of Sunway
Velocity.
Velocity Hotel and Velocity Medical Centre under construction. On
other projects in Sunway Velocity, we gather that Sunway Velocity Hotel,
which is a 4-star business hotel, is under construction and due for opening by
2H2017. On the other hand, Sunway Velocity Medical Centre with 240 beds is
currently under construction with targeted opening in 4Q2018.
Maintain Neutral with an unchanged TP of RM3.25. We maintain our
earnings forecast for FY16-17 as we had already inputted the earnings
contribution from Sunway Velocity mall to our earnings forecast. We also
maintain our TP for Sunway at RM3.25, based on Sum-of-Parts valuation. We
are keeping our Neutral stance on Sunway due to overall subdued property