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Tuesday, December 20, 2011

'Sunway's Iskandar entry a positive move'

Sunway Bhd's entry into Iskandar Malaysia is a positive move given the cheap price of land acquisition, prime location and existing infrastructure in place.

HwangDBS Vickers Research, in a research note today, said the land acquisition of RM25 per square foot was cheap compared with recent land sale at RM38 per square foot.

It said with an implied pricing for residential portion at RM400 per square foot and commercial land 15 to 20 per cent higher, completion of other major projects there next year would enhance Sunway's pricing power.

"Other benefits include favourable tax incentives, no Bumiputera and low-cost housing content," it said.

Meanwhile, OSK Research said Sunway's entry into Iskandar Malaysia would enable the company to build its presence in the region and tap into the abundant growth opportunities offered by the property market there.

Both research houses maintained a "buy" call on Sunway with HwangDBS Vickers maintaining its target price at RM3.30 per share while OSK Research's fair value was unchanged at RM3.31 per share.

By Bernama

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