$SUNSURIA / 3743 (SUNSURIA BERHAD)
Research by Public
Neutral - TP RM0.55

"Broadening Revenue Stream"

Sunsuria Berhad’s (Sunsuria) strategy on diversifying into healthcare and education services over the years could see more meaningful contributions soon. Sunsuria’s healthcare division, through Icon Sunsuria Sdn Bhd, which entered into a partnership with Island Hospital Sdn Bhd to set up its first cancer centre in Penang i.e.Icon Sunsuria Cancer Centre, commenced operations early this year while its strategic partnership with Concord College International Limited to establish and operate England’s premier international school (with up to 1,200 students capacity) within Sunsuria City in Sepang, Selangor is now expected to commence its first intake in September. Boarders will arrive on Sept 1, 2024 while classes begin on Sept 2, 2024. We understand that the Group intends to grow these two segments which were initially intended to enhance the value of its property projects to profit centres in the future. As such, we expect Group’s earning to likely to be stronger as these segments mature into breakeven levels. 1H Group net profit of RM6m (+1.2% YoY) constituted about 37.2% of our full year estimates only but we expect 2HFY24 to be stronger. No change to our earnings estimates. Unbilled sales stood at RM896.7m as of 31 March 2024. All told, we maintain our Neutral call and TP of RM0.55, at c.0.5x to book value.

Analyst:
Tan Siang Hing
research@publicinvestbank.com.my