KUALA LUMPUR: Maybank Research keeps its 'hold' rating on Sunway Bhd with a RM3.05 target price, on assumption that it is on track to hit sales target.
"We visited Sunway’s project in Medini, Johor last week. The maiden launch of Citrine office suites at about RM740 per square feet gross average selling price (ASP) has received a strong response.
"All 167 units were fully booked over a weekend. Meanwhile, Sunway’s other projects in the Klang Valley namely, Geo Residences 2 and V Residence 2 were 70 per cent booked and 78 per cent sold/booked at 62 per cent and 16 per cent respectively .
"Management is confident it can achieve its sales target of RM1.3 billion (effective stake) for financial year 2014. Including RM163 million bookings achieved at Citrine and Geo Residences 2, seven months 2014 sales should be around RM963 million, meeting 74 per cent of its full-year sales target for financial year 2014," said Maybank in its research notes.
Maybank said it is pleasantly surprised by the strong bookings at the Citrine office suites.
"Apart from the strong demand from its business associates and repeat buyers, the success in the Citrine office suites could also be attributed to the lack of office supply in the Medini-Nusajaya area and its relatively attractive pricing.
"This is versus the soon-to-be launched WCT’s Volt Corp Park office suites at RM1,000 per square feet and Mah Sing’s Meridin SoVo at RM737 per square feet."
Maybank said it raised Sunway's earnings forecasts by 8-12 per cent and Revaluated Net Assets Value的 (RNAV) by 35 sen per share.
"This is to factor in the better-than-expected bookings at the Citrine office suites and change in our land price assumptions. Our sales assumption for FY 2014 is slightly raised to RM1.31 billion from RM1.29 billion. The stock currently fairly priced trading at 11 times financial year 2014 price earnings ratio versus its historical mean of 8.7 times."