Can SUNSURIA 3743 SUNSURIA BERHAD shine brightly on possible auto industrial park venture?

 Can  SUNSURIA 3743 SUNSURIA BERHAD shine brightly on possible auto industrial park venture?


Property developers are largely counters investors would prefer to give them a miss due to the slowdown and glut in the sector.


But one particular property developer has been getting investors’ attention especially on April 3.


Look at Sunsuria Bhd, (some analysts describe it as a ‘versatile developer’) the counter skyrocketed 53% to close at 50 sen on Apr 3.


The massive jump could be due to news that Sunsuria will be one of the four parties entered into a MoU with China’s Geely Holdings to discuss the construction of a high-tech automobile industrial park venture in Tanjung Malim, Perak.


While such JV is still at the discussion stage, excitement over the possibilities is understandable.


The counter managed to touch a 52-week high of 54 sen, rising from a low of 32 sen.


But investors will need to be cautious as many early entrants may be looking to sell on news especially with little information on the JV.


Sunsuria really needs a good boost after posting a disappointing 1QFY23 results, mainly due to deferment of certain launches in Sunsuria City township given the challenging operating environment.


Sunsuria’s 1QFY23 net profit of RM1.3 million was down 86.1% YoY and -66.4% lower QoQ.

Fundamentally, the property developer has been able to show good profits even during the lockdown due to the Covid-19.


The counter is also deemed to be very much undervalued as the NTA is only at 1.05 times versus around 2 to 3.6 times for other property counters.


Over the years, especially during the Covid period, many property developers including Mah Sing Group ventured into other businesses such as glove manufacturing.


However, Mah Sing’s glove venture may now be a drag on the company.


But for Sunsuria, it recently announced plans to incorporate healthcare-driven initiatives into its developments beginning with its flagship development at Sunsuria City.


The property developer launched Sunsuria Care which is an integrated platform for community-driven initiatives with Care Hub being its first project.


The company said the Care Hub will be manned by professionally qualified nurses and medical assistants under the management of a doctor, who are equipped to answer residents’ health-related enquiries either in person, by a phone call or through text messages.


Sunsuria also plans for the Care Hub at the Celebration Centre at Sunsuria City to be expanded into Sunsuria Medical Clinic by the end of this year.


Investors may like Sunsuria for the differentiation factor but if not careful, some diversification may prove to be disastrous.


As it is, Sunsuria has a lot of work to keep itself busy in the next decade.


It has a remaining total GDV of RM9 billion, sitting on a 396 acres of undeveloped landbank which we estimate could take at least 8-10 years to develop.

With much going on for its development projects, Sunsuria could be a gem among the property developers.
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