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KUALA LUMPUR: Malaysian builder Sunway Holdings expects record profits in fiscal 2010 as it plans to tender for jobs worth up to RM16 billion (US$4.84 billion) globally, a top executive was quoted saying by Reuters.
The company, ranked seventh among local builders with a market value of US$268 million, said its construction orderbook is expected to grow by one-third to RM4 billion this year, partly boosted by the Malaysian government's roll-out of public sector contracts.
"Market conditions have improved over the last six months and we are confident of securing some projects that we have tendered locally," managing director Yau Kok Seng, a chartered accountant by training, said in an interview on Friday, March 19.
Malaysia, home to Asia's largest budget carrier AirAsia, is planning a new low-cost carrier terminal (LCCT) that will cost RM2 billion to build.
Sunway has submitted its tenders for some of the LCCT jobs and Yau expects the winning bids to be announced as soon as this month.
Other large-scale infrastructure projects that will likely be implemented this year include a RM7 billion light railway transit project near the Malaysian capital as well as a water treatment plant and water transfer projects in the central Pahang state, said Yau.
Construction is the largest revenue earner for Sunway, accounting for more than half of the total. Quarrying, building materials, property development as well as trading and manufacturing make up for the rest.
Overseas operations, which comprise mainly the construction and property development projects in China, Singapore and the Middle East, account for 80 percent of its pre-tax profit, the company said.
In China, Sunway operates through Hong Kong incorporated Sunway Global, a four-year old partnership with global investment bank Goldman Sachs. Goldman owns a 24 percent of Sunway Global.
Sunway shares were up 2.72 percent at the close of the early trading session on Friday. The stock has risen 16 percent so far this year, outpacing the construction sector index's gain of 4.6 percent.
Credit Suisse this week initiated coverage of Sunway Holdings with an outperform call, saying the company is "a cheaper proxy" to the construction sector compared to its larger rivals such as IJM, Gamuda and WCT.
Sunway trades at 8.1 times 2010 earnings, marking a 44 percent discount to the sector's 13.5 times. IJM, the biggest builder in the country by assets, trades at 13.8 times, Gamuda at 13.5 times and WCT at 12.9 times, said Credit Suisse in a research note issued on Mar. 15.
Six of seven analysts tracked by Thomson Reuters I/B/E/S have either a buy or a strong buy call on Sunway. The average target price by the analysts was 1.77 ringgit a share, about 17 percent higher than its current market price.
The earnings forecasts by the analysts put Sunway's 2010 net profit at RM120.54 million and revenue at RM2.11 billion. Previous year comparisons were not available as Sunway changed its financial year-end to December last year. - Reuters
The company, ranked seventh among local builders with a market value of US$268 million, said its construction orderbook is expected to grow by one-third to RM4 billion this year, partly boosted by the Malaysian government's roll-out of public sector contracts.
"Market conditions have improved over the last six months and we are confident of securing some projects that we have tendered locally," managing director Yau Kok Seng, a chartered accountant by training, said in an interview on Friday, March 19.
Malaysia, home to Asia's largest budget carrier AirAsia, is planning a new low-cost carrier terminal (LCCT) that will cost RM2 billion to build.
Sunway has submitted its tenders for some of the LCCT jobs and Yau expects the winning bids to be announced as soon as this month.
Other large-scale infrastructure projects that will likely be implemented this year include a RM7 billion light railway transit project near the Malaysian capital as well as a water treatment plant and water transfer projects in the central Pahang state, said Yau.
Construction is the largest revenue earner for Sunway, accounting for more than half of the total. Quarrying, building materials, property development as well as trading and manufacturing make up for the rest.
Overseas operations, which comprise mainly the construction and property development projects in China, Singapore and the Middle East, account for 80 percent of its pre-tax profit, the company said.
In China, Sunway operates through Hong Kong incorporated Sunway Global, a four-year old partnership with global investment bank Goldman Sachs. Goldman owns a 24 percent of Sunway Global.
Sunway shares were up 2.72 percent at the close of the early trading session on Friday. The stock has risen 16 percent so far this year, outpacing the construction sector index's gain of 4.6 percent.
Credit Suisse this week initiated coverage of Sunway Holdings with an outperform call, saying the company is "a cheaper proxy" to the construction sector compared to its larger rivals such as IJM, Gamuda and WCT.
Sunway trades at 8.1 times 2010 earnings, marking a 44 percent discount to the sector's 13.5 times. IJM, the biggest builder in the country by assets, trades at 13.8 times, Gamuda at 13.5 times and WCT at 12.9 times, said Credit Suisse in a research note issued on Mar. 15.
Six of seven analysts tracked by Thomson Reuters I/B/E/S have either a buy or a strong buy call on Sunway. The average target price by the analysts was 1.77 ringgit a share, about 17 percent higher than its current market price.
The earnings forecasts by the analysts put Sunway's 2010 net profit at RM120.54 million and revenue at RM2.11 billion. Previous year comparisons were not available as Sunway changed its financial year-end to December last year. - Reuters
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