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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

Sunrise current income sustainable: Analysts

Property analysts are optimistic Sunrise Bhd will sustain its current earnings level into the financial year ending June 31, 2011, given the number of projects in the pipeline.

OSK Investment Research said the company's near-term earnings would receive a boost from its current unbilled sales of RM714.1 million and from the sale of the RM990 million 28 Mont' Kiara (MK28) condominium project.

The gross development value of Solaris Tower, to be launched in March or April, was estimated at RM528 million.

"Other mid-term projects include its 50:50 joint venture with Sime Darby on the RM1.0 billion Bukit Jelutong development project which is likely to kick-in by FY11 and the Canadian build-then-sell project by mid-FY11, both of which we have yet to account into our forecasts.

"Tweaking some assumptions on completion rates, particularly for 11 Mont' Kiara condominums, we are lowering our financial year ending June 31, 2010 by some five per cent while FY11 is revised upward by some 25 per cent," it said today.

Sunrise registered a 13 per cent drop in net profit to RM71.79 million for the first-half ended Dec 31, 2009 from RM82.58 million posted in the same period of 2008.

Turnover declined to RM348.59 million, for the period reviewed, from RM401.35 million previously.

OSK said Sunrise's first-half annualised net profit was 18 per cent below its full-year expectation and 7.3 per cent below consensus estimate.

Sharing the same view, ECM Libra Investment Research, in a separate statement, said the property developer's first-half results came within house but were below market expectation.

It said Sunrise's net profit achieved 47 per cent and 44 per cent of house and consensus estimates respectively.

" We tweak our earnings for FY10-FY12 by 0.8 per cent to 2.9 per cent to account for better than expected sales of MK28 as well as higher selling price," it added.

By Bernama

Sunrise H1 profit falls 13pc to RM72m

Property developer Sunrise Bhd saw its net profit fall 13 per cent to RM71.8 million for the half-year ended December 31 2009.

Its executive chairman Tong Kooi Ong said the reason for its net profit decline was because the previous corresponding period had included a one-off gain from the sale of office space in Plaza Mont' Kiara and an Australian asset.

"Excluding these one-off gains, the company's underlying net profit for the current period would have risen 14 per cent year-on-year," he said during a briefing on company results in Kuala Lumpur yesterday.

Tong expects Sunrise to sustain its performance for the second half of its present fiscal year.

"Honestly, I don't think we will do a lot better but we will definitely not do any worse," he said.
Tong added that interest rates are likely to remain low, while loan approvals for mortgages will remain strong and building material prices to stay stable.

The company will continue to reduce its gearing, which has improved to 35.7 per cent in December 31 2009, from 45.7 per cent in June 30 2009.

For the July-December 2009 period, Sunrise's revenue declined 13 per cent to RM348.59 million due to the completion of its Meridin, Mon't Kiara 10 and part of Solaris Dutamas properties.

Its unbilled sales as at December 31 2009 was RM714 million.

By Business Times