In a research note here today, ECM Libra said, it has raised Sunway's estimates for financial year 2011 and 2012 by 0.7 per cent to 7.5 per cent respectively, as the company remains the top "buy" for the construction sector.
"This is premised on a strong earnings growth of 67.6 per cent in financial year 2010 and undemanding forward price to earnings (P/E) valuation of 7.8 times, more landbank acquisitions in the pipeline as well as strength in securing overseas construction contracts," it said.
ECM Libra's target price, which based on 10 times price to earning on mid financial year earnings per share (EPS), remains unchanged at RM2.61 as the impact on financial year earnings is negligible.
Last Friday, Sunway Holdings entered into a joint venture (JV) agreement with Dasa Tourist Complex Pvt Ltd to undertake a mixed development project in Colombo, Sri Lanka.
The project is on a piece of 0.46 hectares (1.14 acres) freehold land with an expected gross development value (GDV) of RM250 million.
The development is for a 34-storey building comprising 180 residential and 70 commercial development units.
Sharing the same view, OSK Research is also maintaining a "buy" call on Sunway Holdings with a target price of RM2.52.
By Bernama
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