12 May 2012

Sunway Berhad: Week 19 (7-11 May) Stock Picks Commentary

Stock Picks #4
Sunway Berhad (SUNWAY)

Week high : RM 2.46 (Up 16 sen – 7%)


Sunway Construction was awarded Package V4 for works between Section 17 in Petaling Jaya and the Semantan Portal, where the alignment will continue underground.

Market reacted positively as the MRT tender award would generate additional revenue to Sunway Berhad and this could potentially boost profits, even though the exact worth of the contract awarded to Sunway Berhad is not publicly known.

Before you decide to splurge on Sunway stocks, do take note that on 24 April, AmResearch reports that Sunway’s property division is feeling the impact of the 70% loan-to-value ruling introduced in November last year.

This is because Sunway’s pricing for its products has always been on the high side and 70% of its planned launches are priced at least RM1 million per unit. Consequently, AmResearch believes that it will be challenging for Sunway to meet its RM1.9 billion sales target this year on weaker sales since early 2012.

SUNWAY stock price surged 7% or 16 sen within the day on 9 May to a high of RM 2.46 and closed at RM 2.33 for the week.

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