MARC Ratings has affirmed its rating of A+IS on Sunsuria Berhad’s RM500.0 million Sukuk Wakalah Programme. The rating outlook is stable. The total outstanding amount under the programme stood at RM106 million as at end-February 2025.
Sunsuria’s conservative approach to property development, healthy overall take-up rates and low-to-moderate leverage position remain key rating drivers. Moderating factors are execution risk associated with the group’s expansion into other business segments and the potential increase in inventory from lacklustre take-up for its commercial development in Setia Alam.
As at end-December 2024, ongoing projects, all of which are in the Klang Valley, had a total gross development value (GDV) of RM2.1 billion with an average take-up rate of 76.2%. MARC Ratings notes that Sunsuria had unbilled sales of RM757.1 million as at end-December 2024 which provide earnings visibility in the near term. Aside from its commercial projects, its residential projects, mainly the Bangsar Hill Park development and those in the Sunsuria City township, have generally received healthy response. This is attributed to the matured location of Bangsar Hill Park and the growing amenities, including those related to education and healthcare, in its flagship development, Sunsuria City.
Its two ongoing commercial projects – the Sunsuria Forum Corporate Office in Setia Alam and The Chapter in Sunsuria City, Sepang — recorded an average take-up rate of 46.1%. As such, there is an increasing likelihood that inventory level, which stood at RM39.4 million as at end-December 2024 (end-March 2024: RM28.8 million), will increase to approximately RM130 million upon the upcoming completion of the Sunsuria Forum Corporate Office.
The rating agency notes that the group’s business diversification efforts will not only enhance the value of its townships but also provide recurring revenue streams. Following the strategic partnership with Concord College International Limited, Sunsuria has established Concord College International School Malaysia which commenced operations in September 2024 with an initial enrolment of 200 students. For the first quarter of financial year ending September 2025 (1QFY2025), the group’s education segment contributed RM2.9 million to group revenue (around 2% of total revenue). This is expected to grow with the increase in student enrolment. Sunsuria also secured exclusive rights to establish Concord campuses across Asia, targeting the launch of one campus in another Asian country and another in Malaysia within the next 10 years.
Apart from this, Sunsuria is also leveraging its joint venture with Icon Group to expand its foothold in the healthcare segment. Following the launching of the Icon Oncology Centre in Island Hospital, Penang, in January 2024, the group plans to establish additional oncology centres over the longer horizon. The rating agency notes that the revenue contribution and capital investment in these ventures are expected to remain modest in the near term.
For FY2024, Sunsuria recorded RM627.8 million in revenue — a 24% increase y-o-y — driven by higher progress billings from key property developments such as Bangsar Hill Park, Sunsuria City, and the industrial Sunsuria Kejora Business Park (Phase 1) in Puncak Alam. Operating profit rose to RM108.8 million (FY2023: RM73.7 million), translating into an operating margin of 17.3%. For 1QFY2025, revenue increased by 15.4% y-o-y to RM158.4 million, bolstered by progress billings from ongoing projects and contribution from its education segment. The new business segments are expected to gradually enhance overall top-line growth.
As at 1QFY2025, group borrowings remained steady at RM592.1 million (FY2024: RM570.4 million). Debt-to-equity (DE) ratio stood at 0.56x and net DE ratio was 0.36x. The two upcoming sukuk maturities in October 2025 and December 2025 are expected to be met through a combination of internal funds and other borrowings. Borrowings are not forecast to increase substantially from the current level. Cash and bank balances of RM112.0 million (excluding the Housing Development Act balance) and unutilised credit lines of RM185.8 million offer moderate financial flexibility.