KUALA LUMPUR: Sunway Bhd 's 2022 results have surprised Affin Hwang Capital on the upside as its core net profit jumped 80 per cent year-on-year to RM716 million as all the divisions performed better.
Affin Hwang said Sunway had seen a strong earnings recovery with the lifting of pandemic movement restrictions and the reopening of borders, as well as realising gains from the disposal of an investment property and other investments.
"Sunway's core net profit of RM716 million was 31-36 per cent above consensus and our forecasts of RM526 million-RM547 million.
"Revenue (excluding healthcare division) surged 40 per cent to RM5.2 billion in 2022, driven by higher revenue for all divisions. Its pre-tax profit doubled to RM920 million in 2022, driven by higher property investment (RM237 million profit in 2022 versus RM8 million loss in 2021, construction, trading, quarry and property development earnings."
Affin Hwang added that its healthcare division was reclassified as a joint venture following the partial disposal of its stake to GIC, which contributed RM177 millio share of earnings.
"We like Sunway as a key beneficiary of the re-opening of key economic sectors and re-opening of borders will likely sustain the strong recovery in its leisure and hospitality and healthcare businesses." it said.
The firm lifted its 2023-24 core earnings per share by 4.0-6.0 per cent to reflect higher property development and property investment earnings, partly offset by its earlier cut in Sunway Construction earnings.
It reaffirmed its "Buy" call on Sunway with a higher 12-month target price of RM2.34 from RM2.29.