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Friday, January 29, 2010

Sunrise prefers markets with fewer home players

KUALA LUMPUR: Sunrise Bhd wants to expand into markets where there aren’t many Malaysian developers, said executive chairman Datuk Tong Kooi Ong.

“Every Tom, Dick and Harry has gone to Vietnam. There are (other) countries that have a lot of potential ... where there aren’t many Malaysian players,” he said at an analyst briefing yesterday when asked about the potential of venturing into Vietnam.

Tong said countries such as Singapore and China were potential markets. “We’re looking at China but so far there is nothing yet. Singapore is a possibility. The pricing there is fantastic. However, we haven’t had good opportunities but we’re looking,” he said.

Tong said while the Mont’Kiara area in Kuala Lumpur would continue to be a growth focus for the company, he noted the importance of having a presence in more than one location.

“It’s difficult to grow in just one location. You need to move beyond your (key) geographical location if you want to double-up (your earnings).”

Sunrise has an on-going project in Vancouver, Canada which it hopes to launch in the second half of 2010, subject to market conditions.

The condominium project with a gross development value of RM1.13bil, would be launched in two phases three years apart, said Tong.

He also said it was premature to disclose if there would be future tie-ups with Sime Darby Bhd to develop other projects.

“Neither party has contemplated another joint venture (JV) outside of Bukit Jelutong. But we’re both hoping there will be other JVs that can benefit each other,” Tong said.

Earlier this week, Sunrise and Sime Darby announced they would jointly develop a RM1bil integrated commercial property project in Bukit Jelutong, Selangor.

Tong said there was a need to have a commercial development within the area to give it “more life.” “It (the project) will accelerate development for Sime Darby and expand our reach there,” he said.

Tong also said the company was targeting to reduce its gearing to zero within the next four years.

He said potential cashflow from unbilled sales of existing and future projects would help reduce its gearing going forward. The company’s unbilled sales stood at RM714mil as at Dec 31, 2009.

Sunrise’s net debt declined to RM377mil in December from RM445.7mil six months earlier. Net gearing also improved to 35.7% in December from 45.7% in June.

“Barring major land acquisitions, we will continue to work towards reducing gearing, but near-term gearing may increase due to construction funding for our 28 Mont’Kiara (MK28) and Canada projects,” said Tong.

He added that Sunrise would also be “stingy” with dividends to achieve its zero-gearing target.

Sunrise has received 150 bookings for its MK28 high-rise residential development since it was soft launched in December. The project comprises 460 units with a GDV of RM990mil. “The success of MK28 is the most critical factor for the company in the next six months. Further ahead, the success of the launch of Solaris Towers is also critical,” said Tong.

Sunrise will be launching the Solaris Towers project in Jalan Sultan Ismail in the first half of the year.

Meanwhile, Sunrise’s net profit for the second quarter ended Dec 31 dipped 34% to RM34.52mil due to unbilled sales and a delay in property launches. Revenue also dropped 22% to RM158.32mil. The company did not declare any dividends for the quarter.

By The Star

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