Sunway Construction Group Bhd. : Fairly valued, but don’t skip the other factors

Sunway Construction Group Bhd. relative valuation is now NEUTRAL. It was previously rated OVERVALUED, and has a fundamental analysis score of 59.

Our analysis is based on comparing Sunway Construction Group Bhd. with the following peers – Ruentex Development Co., Ltd., ADO Group Ltd., Alliance Global Group Inc. and An Duong Thao Dien Real Estate Trading Investment JSC (9945-TW, ADO-IL, AGI-PH and HAR-VN).

Relative Valuation

Sunway Construction Group Bhd. is currently neutrally valued, as its previous close of MYR 1.78 lies within the CapitalCube estimate range of MYR 1.72 to MYR 1.81. Over the last 52 week period, Sunway Construction Group Bhd. has fluctuated between MYR 1.42 and MYR 1.82.

Relative Valuation

Company Overview

  • Considering peers, relative outperformance over the last year and the last month suggest a leading position.
  • It currently trades at a Price/Book ratio of (4.66).
  • 5263-MY outperforms its peers with a relatively high operating performance and the market also expects faster growth relative to its peers
  • 5263-MY has relatively low net profit margins while its asset efficiency is relatively high.
  • Compared with its chosen peers, the company’s annual revenues and earnings change at a slower rate, implying a lack of strategic focus and/or lack of execution success.
  • 5263-MY‘s return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable.
  • The company’s median gross margin and relatively low pre-tax margin suggest high operating costs versus peers.
  • While 5263-MY‘s revenues have increased slower than peer median, the market currently gives the company a higher than peer median P/E ratio and may be factoring in some sort of a strategic play.
  • The company’s level of capital investment is relatively low and suggests it is milking the business.
  • 5263-MY has the financial and operating capacity to borrow quickly.

Investment Outlook

Sunway Construction Group Bhd. has a fundamental score of 59 and has a relative valuation of NEUTRAL.

Sunway Construction Group Bhd.’s price is very close to its implied price, thus not allowing for a specific classification into the Value – Price Matrix.

Fundamentals Vs Relative Valuation

Quadrant label definitions. Hover to know more

Safety, Value Play, Value Trap, Speculative

Drivers of Valuation

5263-MY has an Outperforming profile relative to peers.

5263-MY achieved a better operating performance than the median of its chosen peers (ROE of 26.13% compared to the peer median ROE of 8.00%) and the market still expects faster growth from it than from those peers (P/E of 18.63 compared to peer median of 9.17).

The company currently trades at a Price/Book ratio of 4.66.

Valuation Drivers

Quadrant label definitions. Hover to know more

Outperforming, Harvesting, Challenged, Turnaround

5263-MY has moved to an Outperforming from a relatively high ROE profile at the prior year-end.

ROE % (On Common Equity)
Price To Earnings

Peer Analysis

A complete list of valuation metrics is available on the company page.

Company Profile

Sunway Construction Group Bhd. is an investment holding company, which engages in the provision of management services. It offers building construction; civil and infrastructure; design and build; foundation and geotechnical engineering; mechanical, electrical, and plumbing services; manufacture and sale of precast concrete products; and virtual design and construction. The company was founded on September 10, 2014 and is headquartered in Subang Jaya, Malaysia.

Disclaimer

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