Sunway City: Buy, target price RM4.33

ECM Libra Investment Reach maintained its "buy" call with a target price of RM4.33 on Sunway City Bhd (SunCity) after the developer said it would be injecting eight investment properties into a property trust.

The research firm estimates the eight properties to have a value of RM2.9 billion. This would make SunCity's Real Estate Investment Trust (REIT) the largest in Malaysia upon listing.

ECM hasn't changed its earnings estimates for the developer, but said it was nevertheless positive on this latest news given that SunCity made another step towards realising its long-awaited REIT listing plan.

The eight properties are Sunway Pyramid Shopping Mall, Sunway Resort Hotel & Spa, Pyramid Tower Hotel, Menara Sunway, Sunway Carnival Mall, Sunway Hotel Seberang Jaya, Suncity Ipoh Hypermarket and Sunway Tower.
The sale consideration will be satisfied via cash or units in the proposed REIT, or both.

By Business Times