KUALA LUMPUR: Hwang DBS Vickers Research said Sunrise Bhd's 2QFY10 results were within its and consensus estimates and it maintained a Buy at RM2.21 while it raised the target price to RM2.80 from RM2.60 (based on 30% discount to revised RNAV of RM4.02).

It said on Friday, Jan 29 that Sunrise was diversifying its geographic locations, instead of focusing only on Mont’ Kiara. It also raised earnings by 10-15% after imputing stronger sales and JV with Sime Darby at Bukit Jelutong.

"Result within expectations. 2QFY10 net profit came in at RM35 million (+5% y-o-y excluding exceptionals, -7% q-o-q). Revenue fell due to completion of Meridin, MK10, and part of Solaris Dutamas, but bottomline impact was cushioned by improved EBIT margins from higher-margin projects (MK11, Residence) and cost savings.

"It registered RM66 million new sales at MK11 and Residence in 2QFY10 (1QFY10: RM147 million, 2QFY09: RM22 million). Unbilled sales of RM714 million should support earnings up to 2011, excluding new launches. MK28, Sunrise’s first launch in two years, was unveiled in December 09 (GDV: RM990 million, ASP: RM785psf) with 33% of 460 units offered booked todate.

Hwang DBS Vickers Research said Sunrise aims to offer multiple products at several locations to achieve the next leg-up in earnings growth (Stage 1: Single product at single location i.e. high-end condos at Mont’ Kiara; Stage 2: Multiple products at single location i.e. introducing mixed development in Mont’ Kiara).

Upcoming launches (Solaris Tower in KL Golden Triangle, Canada mixed development, Kajang gated landed residential) and recent landbank acquisition (Sime Darby JV at Bukit Jelutong) reflects its new strategy to leverage on its strong brand name and track record. This could include potential overseas ventures, most likely in developed markets.