KUALA LUMPUR: Sunsuria Bhd's strategy of diversifying into healthcare and education services over the years could see more meaningful contributions soon, said Public Investment Bank Bhd (PublicInvest).
Over the years, Sunsuria has been nurturing its diversification plans into healthcare and education services, which has started to complement its property business.
PublicInvest said the company believes these segments can start to contribute meaningful growth to revenue as soon as the businesses mature.
"We understand that the company intends to grow these two segments, which were initially intended to enhance the value of its property projects to profit centres in the future.
"As such, we expect the company's earnings to be stronger as these segments mature into breakeven levels," it said in a note.
Sunsuria's healthcare division, through Icon Sunsuria Sdn Bhd, which entered into a partnership with Island Hospital Sdn Bhd to set up its first cancer centre in Penang, i.e., Icon Sunsuria Cancer Centre, commenced operations early this year.
Meanwhile, its strategic partnership with Concord College International Ltd. to establish and operate England's premier international school (with up to 1,200 student capacity) within Sunsuria City in Sepang, Selangor, is now expected to commence its first intake in September.
Boarders will arrive on Sept 1, 2024, and classes will begin on Sept 2, 2024.
On financial updates, PublicInvest said that Sunsuria's first half (1H) 2024 net profit of RM6 million constituted about 37.2 per cent of its full year estimates.
The research firm expects Sunsuria's 2H 2024 to be stronger, adding that there is no change to its earnings estimates.
"Unbilled sales stood at RM896.7 million as of March 31, 2024. All told, we maintain our neutral call and target price of 55 sen," it added.