SUNWAY (5211) – Fundamental Analysis (10 Mar 2015)
SUNWAY Analysis:-
Excel – http://1drv.ms/1ERgwan
Notes – http://tinyurl.com/kxx3ezv
My View:-
Valuation:
Absolute EY%:
Trailing:
FY14 (EPS: 0.431) – Fair value 4.08 (Fair Value Uncertainty: MEDIUM)
R4Q (EPS: 0.431) – Fair value 4.08 (Fair Value Uncertainty: MEDIUM)
Forward:
FY15 (EPS: 0.32) – Fair value 3.02 (Fair Value Uncertainty: HIGH)
FY16 (EPS: 0.323) – Fair value 3.06 (Fair Value Uncertainty: HIGH)
EPS applied to reach the current stock price (3.44): 0.364
5Y DCF:
Good Scenario: 9.1 (Fair value uncertainty: LOW)
Base Scenario: 8.01 (Fair value uncertainty: LOW)
Bad Scenario: 7.06 (Fair value uncertainty: LOW)
Ugly Scenario: 6.21 (Fair value uncertainty: LOW)
At current price (3.44), based on RDCF, assumption of FCFF growth rate in the next 5 years is -21%.
SUNWAY FY14 performance is quite impressive.
Property division achieved new sales of RM1.7b which was slightly lower than FY13’s RM1.8b.
Construction division EBIT margin which has improved significantly to 7.9% in FY14 (against FY13’s 1.9%).
The higher construction margin in FY14 may be as a result of higher contribution from better margin construction job in precast concrete products.
Sunway Construction (SCG) listing likely to be in Jun-15. On 9-Feb-2015, SUNWAY announced that its proposal to list SCG has received Securities Commission approval.
In the long term, the consistency of the Company in meeting earnings target and dividend payment should support its share price.
On the other hand, in view of slowdown in property industry and cooling off in Iskandar area, even if SUNWAY aims to achieve a similar RM1.7b new sales, I am not so optimistic with the industry outlook.
In terms of DCF valuation, in long term, SUNWAY valuation is very attractive. In short term, EY% valuation is not so attractive due to lower EPS estimation for FY15 and FY16.
I will buy SUNWAY again if there is a good (technical) buy opportunity.
Latest Financial – Q4 2014 Financial Report (25 Feb 2015) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1885193
At the time of writing, I did not own shares of SUNWAY.
https://lcchong.wordpress.com/2015/03/10/sunway-fundamental-analysis-10-mar-2015/
SUNWAY Analysis:-
Excel – http://1drv.ms/1ERgwan
Notes – http://tinyurl.com/kxx3ezv
My View:-
Valuation:
Absolute EY%:
Trailing:
FY14 (EPS: 0.431) – Fair value 4.08 (Fair Value Uncertainty: MEDIUM)
R4Q (EPS: 0.431) – Fair value 4.08 (Fair Value Uncertainty: MEDIUM)
Forward:
FY15 (EPS: 0.32) – Fair value 3.02 (Fair Value Uncertainty: HIGH)
FY16 (EPS: 0.323) – Fair value 3.06 (Fair Value Uncertainty: HIGH)
EPS applied to reach the current stock price (3.44): 0.364
5Y DCF:
Good Scenario: 9.1 (Fair value uncertainty: LOW)
Base Scenario: 8.01 (Fair value uncertainty: LOW)
Bad Scenario: 7.06 (Fair value uncertainty: LOW)
Ugly Scenario: 6.21 (Fair value uncertainty: LOW)
At current price (3.44), based on RDCF, assumption of FCFF growth rate in the next 5 years is -21%.
SUNWAY FY14 performance is quite impressive.
Property division achieved new sales of RM1.7b which was slightly lower than FY13’s RM1.8b.
Construction division EBIT margin which has improved significantly to 7.9% in FY14 (against FY13’s 1.9%).
The higher construction margin in FY14 may be as a result of higher contribution from better margin construction job in precast concrete products.
Sunway Construction (SCG) listing likely to be in Jun-15. On 9-Feb-2015, SUNWAY announced that its proposal to list SCG has received Securities Commission approval.
In the long term, the consistency of the Company in meeting earnings target and dividend payment should support its share price.
On the other hand, in view of slowdown in property industry and cooling off in Iskandar area, even if SUNWAY aims to achieve a similar RM1.7b new sales, I am not so optimistic with the industry outlook.
In terms of DCF valuation, in long term, SUNWAY valuation is very attractive. In short term, EY% valuation is not so attractive due to lower EPS estimation for FY15 and FY16.
I will buy SUNWAY again if there is a good (technical) buy opportunity.
Latest Financial – Q4 2014 Financial Report (25 Feb 2015) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1885193
At the time of writing, I did not own shares of SUNWAY.
https://lcchong.wordpress.com/2015/03/10/sunway-fundamental-analysis-10-mar-2015/
