May 11, 2010

SUNCITY 6289 : Maintain Buy - HWDBS

SunCity (RM3.92; Buy; Price Target: RM4.80) Stock Code 6289

REIT in motion
•  Disposal of assets to REIT for RM3.7b (~6.6% yield; RM328m gain on disposal) – 7% higher than our expectations. 
•  Consideration in shares (SunCity to retain 38% stake in REIT) and RM2.7b cash (30% gearing for REIT)
•  Proceeds to repay debts (turning net cash), development of new offices/landbank acquisitions and working capital
•  Maintain Buy and TP of RM4.80. REIT slated for listing in Jul 2010.

by HWDBS Vickers

The Company's principal activities are that of property investment and development, property and project management, and investment holding.