Sunrise Bhd

There are a total of 3 research houses covered Sunrise Bhd recently. They are Aseambanker, Hdbs and RHB. Below are the target prices from each of them:

Aseambanker - RM4.62
HDBS - RM4.88
RHB - RM4.27

Major points from HDBS' report:

Sunrise is venturing into developing its maiden commercial development in the city center, agreeing to buy a 1.65-acre land near Jalan Sultan Ismail for up to RM35.0m or RM487psf depending on the approval of Development Order by September 2007. Otherwise, Sunrise would only pay RM25.1m for the land. Sunrise also announced the completion of its disposal of investment assets in Plaza Mont’ Kiara for RM90m to Quill Capital Trust.

We are positive on this considering KL’s shortage of Grade A office space. We believe Sunrise is able to leverage on its strong brand name to sell the new project. The purchase also means the proceeds are immediately put into value accretive land acquisition.

We maintain our Buy recommendation on Sunrise with a RNAV-based TP of RM4.90. The acquisition is expected to complete by 2007 and we believe Sunrise is planning to launch the project earliest by next year.

As HDBS mentioned there is a shortage of Grade A office space in KL area, I would think Mah Sing will be benefit from this situation too since they are ready to develop their first commercial project area too - The Icon @ Tun Razak.

While there was no surprise in quarterly results announced by most of the major players last month, most of the research hourses are confident that 2H 07 would be very exciting for property players after a series of good news and incentives announced by Government in the first half of 2007.