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Sunway Holdings
Taking On Legoland
THE BUZZ
Last Friday, Sunway announced that it had won a RM258m job for the construction of the Legoland Theme Park (Package 4) in Iskandar, Johor. The project is scheduled for completion on 2 June 2012.
OUR TAKE
Award expected. We are not surprised that Sunway won the job as we had been consistently
highlighting this possibility since we initiated coverage on the stock in May 2010. Sunway has a
track record with 2 other theme parks, namely Sunway Lagoon and Tambun Lost World.
Including this recent award, Sunway has secured RM295.4m worth of jobs YTD. This
compares with our assumption of RM1bn for FY11 and management’s guidance for RM1bn-
RM1.5bn. Other potential jobs are: (i) LRT Package B and subcontract for Package A, (ii) road
networks in Sarawak under SCORE, and (iii) building-type jobs for the private sector.
Maintain BUY rating. As the company’s job wins YTD are still within our replenishment target,
we keep our estimates unchanged. Our TP continues to be based on the Sunway-SunCity
merger price of RM2.60, which also implies 9.3x and 8.3x FY11-12 earnings. The EGM to vote
on the merger is expected to be held sometime in April. If the proposal goes through, the
merged entity should be listed in July-Aug.
