UOB KayHian Cuts Sunway Target To MYR2.70, Keeps Buy

23 Aug 2012

UOB KayHian cuts Sunway's (5211.KU) target price to MYR2.70 based on 11X FY13 earnings from MYR3.00 ahead of its 2Q earnings announcement due next week. The house also trims 2012-2014 earnings estimates by 9.7%-10% as it reckons that Sunway is turning more conservative in recognizing profits from outstanding orders and unbilled sales.  Still it keeps Buy call as the shares, trading at 9X forward earnings, look cheap compared to peers.  "Defensively, future earnings are comfortably cushioned by recurring income from SunREIT (32% of its net profit) and unbilled sales of about MYR1.8 billion from property development," the house says.  Shares are 0.5% lower at MYR2.20.