KUALA LUMPUR: Hwang DBS Vickers Research is maintaining a Buy on Sunway Holdings with a sum-of-parts target price of RM1.95.

HDBSVR said on Monday,Feb 8 the upside for Sunway Holdings is the cheap valuations and record earnings and expects it to get a fair share of the construction pie.

"Sunway remains the cheapest construction stock in our universe (ex-TRC), trading at FD CY10 PE of 9x. We see strong earnings delivery (2-year CAGR of 45%) and improving contract flows to be key rerating catalysts.

Earnings momentum will continue in FY10 with expected record core net profit of RM123m. The wildcard remains a surge in orders from its spun pile business in China once construction of the US$5 billion to US$6 billion Hong Kong-Zhuhai-Macau bridge takes off.

"Sunway remains upbeat on new orders in FY10, guiding about RM1 billion after achieving RM500 million in FY09. Current RM2.5 billion orderbook provides two years earnings visibility," it said.

HDBSVR said projects in the pipeline include the RM1 billion LCCT terminal building, RM500 million Mengkuang dam, RM1 billion potential new works from Sunway City’s related jobs which would accelerate post listing of its REIT and foreign jobs in India and Middle East.