MIDF raises Sunway target price

MIDF Research raised its target price on Sunway Bhd to RM3.50 per share from RM2.96 after the construction and property group secured a RM452.5 million contract to build a bus rapid transit line in Bandar Sunway.

"We are reducing the discount as we believe sentiment towards Sunway is improving," the research house said in a note on Tuesday. It maintained a 'buy' rating on the stock.

MIDF said the RM452.5 million project will benefit Sunway even though the company has to additionally and separately contribute works estimated at a cost of RM99 million as part of its continuous corporate social responsibility initiative.

"The property segment will benefit as one of the stations is located at Sunway South Quay, an ongoing project in Sunway City," MIDF said.

"Apart from that, other segments like property investment, leisure (Sunway Lagoon Theme Park) and education (Monash University) will also benefit from enhanced connectivity," it added.

As of 10.01am, the shares were unchanged at RM2.76, while the benchmark stock index rose 0.01 per cent.-- Reuters