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Friday, December 25, 2009

Property JV to contribute RM66m to Sunway

PETALING JAYA: Sunway Holdings Bhd’s latest joint property development project in Singapore with Hoi Hup Realty Pte Ltd is expected to contribute earnings of about RM66mil over the project period, RHB Research Institute Sdn Bhd said.

The research house is assuming a profit before tax margin of about 20%.

In a filing with Bursa Malaysia on Wednesday, Sunway had said the 30:70 joint venture was expected to generate a gross development value (GDV) of S$420mil (RM1.03bil).

“The proposed joint venture is not expected to have any immediate material effect on the earnings per share, net assets per share and gearing of Sunway for the current financial period ending Dec 31 but is expected to contribute positively to the future earnings of Sunway group,” the group said in the statement.

The project, expected to be launched in mid-2010, features eight blocks of 12-storey residential flats (totalling about 500 units) with a clubhouse, multi-tiered basement car park, roof terrace and swimming pool.

The joint venture was signed between Sunway’s wholly-owned subsidiary Sunway Developments Pte Ltd and Hoi Hup Realty Pte Ltd and Hoi Hup JV Development Pte Ltd, to set up the joint venture company, Hoi Hup Sunway Property Pte Ltd.

RHB said the latest project was Sunway’s third partnership with Hoi Hup Realty and the first two ventures, also based on the same 30:70 equity structure, had been a great success.

The research house is also positive on the latest development in Sunway.

It said the project would help sustain Sunway’s property profits from Singapore beyond the next two to three years, upon the completion of the first two.

RHB has forecast that the first two property projects by Sunway in Singapore would contribute 21% and 28% to the developer’s total profit before tax.

Analysts said Sunway had been pretty aggressive in bidding for contracts locally and overseas.

It was reported that the group was bidding for foreign and local contracts worth about US$5.7bil.

Sunway is said to have an outstanding orderbook of about RM2.5bil. It has also been awarded a spate of jobs recently.

Early this month, the group was awarded a RM23.4mil job by Damansara Assets Sdn Bhd for piling and substructure works in Johor.

By The Star (by Leong Hung Yee)

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