The transformation continues at Sunway, more than eight years after mega merger

PETALING JAYA (Feb 1): Sunway Bhd has grown by leaps and bounds since it was established after a merger between Sunway City Bhd and Sunway Holdings Bhd more than eight years ago, The Edge Malaysia reported today.

According to The Edge Malaysia, its net profit has more than doubled over the eight-year period to Dec 31, 2018, and has also become a more diversified conglomerate.

The group’s businesses in Malaysia are doing well and it has also set its sights on China, where it seeks future expansion, especially in the property development business.

Group president Datuk Chew Chee Kin says the group has set a target for China’s turnover to match Malaysia’s within the next five to six years.

“Maybe one day, we will have a higher gross development value (GDV) in China than in Malaysia. The market is so big, it is an ocean. So, if we give it more attention, it will grow,” he says in an exclusive interview with The Edge Malaysia.

In the nine-month period ended Sept 30, 2019, Sunway’s businesses in China contributed a mere 3.2% to its revenue of RM3.43 billion. Its Malaysian businesses contributed almost 90%.

When asked how Sunway can compete against China's large property developers, Chew indicates that a lot will boil down to market knowledge and being location-focused, particularly in second-tier Chinese cities, rather than the first tier.

“We will have to know the market and the demand. So, we will probably focus on a few places like Tianjin and Zhuhai — those places that we know quite well.

“We will go into other towns and cities if we find good opportunities, but these are the places that we know. We know the market, the price, the costs … So, it is very predictable.”

Land prices in first-tier cities such as Shanghai and Shenzhen are too prohibitive for a company of Sunway’s size, he says.

He added that China’s property giants have a strong foothold in these cities.

In Tianjin, both phases of condominium development Sunway Gardens, with a GDV of RM990 million, are sold out.

On Sept 12 last year, the group acquired a 6.85-acre leasehold parcel in the city for RM438 million and is proposing to develop seven blocks of condominiums with a GDV of about RM1.3 billion.

Property development aside, Sunway also has manufacturing businesses in China and currently manufactures undercarriages for heavy machinery such as bulldozers and excavators as well as hydraulic fittings.