SUNWAY: Robust Performance Driven by Healthcare Efficiencies and Property Momentum, Buy Rating Reaffirmed
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A leading company has reported its Third Quarter 2025 (3Q25) results, which were in line with market expectations. The positive performance was significantly underpinned by strong cost efficiencies in its healthcare division and robust property sales momentum.
Performance Review
The company’s 3Q25 results reflect a steady operational quarter. For the first nine months of 2025 (9M25), property sales reached MYR3.1bn, demonstrating significant progress towards its full-year target of MYR3.6bn. A notable highlight was the healthcare unit, particularly the newly opened Sunway Medical Centre Damansara, which achieved EBITDA breakeven in August 2025, less than a year after commencing operations. This rapid achievement points to effective cost management and operational ramp-up.
However, overall revenue growth for the quarter remained flat quarter-on-quarter (QoQ). The construction unit experienced a QoQ decline in revenue as a major data centre project neared completion, moving past its peak building phase. While the healthcare segment’s 9M25 EBITDA grew by 3%, its performance was somewhat moderated by the initial operating costs associated with the new Sunway Medical Centre Damansara and Sunway Medical Centre Ipoh, both of which began operations recently. The bed occupancy rate for its healthcare facilities stood at 69%, a decrease from 79% in 9M24.
Property Segment Momentum
The property division saw substantial sales in 3Q25, totaling MYR1.8bn, a significant increase from MYR745.3m in 2Q25. This surge was primarily driven by the successful launch of Otto Place, an executive condominium project in Singapore, which recorded an impressive 94% take-up rate since its July launch. In contrast, some other property projects, such as Sunway Gardens Phase 3 Block 10 in Tianjin and Sunway Flora, reported less encouraging take-up rates of approximately 20%, remaining relatively unchanged from the previous quarter.
Future Outlook and Investment Rating
Looking ahead, the company is poised for continued growth. Recently launched projects in Johor, including Sunway Cochrane, Sunway Majestic, and Sunway LakeHills, are expected to contribute strongly to future sales, given their strategic locations and initial take-up rates of 43%, 21%, and 20% respectively. The acquisition of MCL Land, rebranded as Sunway MCL, is anticipated to enhance future prospects. The completion of three additional Singapore projects in early 2026 is expected to further boost earnings.
The company’s unbilled sales stand at a healthy MYR5.2bn, complemented by an outstanding construction orderbook of MYR5.4bn.
TA SECURITIES maintains a BUY recommendation on the stock, with a target price (TP) of RM0.25, representing a potential upside of 25.0% from its last traded price of RM0.20. The target price incorporates an 8% ESG premium, reflecting the company’s strong ESG score of 3.4 out of 4.
