SUNWAY: Stronger Second Half Anticipated on Strategic Initiatives

A leading investment bank has outlined an optimistic outlook for the company, projecting a stronger second half for the financial year. The positive sentiment is driven by robust interim financial performance, strategic property launches, sustained momentum in construction projects, and improving contributions from its healthcare segment. The analyst has maintained a “BUY” recommendation, signaling confidence in the company’s growth trajectory.

Performance Review

The company reported resilient financial results for the first half of the year, with property sales reaching RM1.3 billion, marking a 2% year-on-year increase. The second quarter alone contributed RM774 million, a significant 34% quarter-on-quarter jump. Year-to-date sales now stand at approximately RM2.3 billion, accounting for about 64% of the full-year sales target.

The Healthcare Group also demonstrated strong growth, delivering RM993 million in revenue for the first half, up 17% year-on-year. This was propelled by higher patient volumes, increased bill sizes, and improved operating theatre utilization, alongside maiden contributions from new facilities. While reported profit after tax (PAT) saw a 14% year-on-year decline due to gestation losses from newly opened hospitals, adjusted PAT for the core portfolio registered a healthy 17% growth, underscoring the resilience of its established operations.

Shareholders are set to benefit from a declared first interim dividend of 4 sen per share, which doubles the payout from the previous year. Management has hinted that second-half dividends are unlikely to fall below this figure, implying a minimum full-year payout of 8 sen per share, equivalent to an approximate 52% payout ratio on earnings projections.

Strategic Growth and Future Outlook

Management anticipates a robust second half, underpinned by a strong pipeline of property projects and continued expansion. Upcoming launches, including Sunway Majestic, Sunway LakeHills, Sunway Cochrane, and Sunway Serene 2, are expected to sustain sales momentum. The construction segment is also poised for continued growth, with sustained momentum from ongoing data centre projects.

The healthcare division remains a key growth driver. Management expects new hospitals like SMC Damansara and SMC Ipoh to achieve EBITDA positivity by the end of 2025 and first quarter of 2026, respectively, aligning with its track record of achieving profitability within 12 months of opening. The group currently operates five hospitals with 1,662 licensed beds, with plans to expand capacity beyond 3,000 beds by 2032 through new developments. The planned Initial Public Offering (IPO) for the healthcare arm in the first quarter of 2026 is highlighted as a significant value-unlocking catalyst for the company.