Sunway Construction Group – 3Q21: Surprises on the upside (SCGB MK, CP MYR1.56, HOLD, MYR1.69, Construction)
Despite work disruption from movement restrictions, SCGB’s 3Q21 net profit exceeded our expectation, bringing 9M21 net profit (+12% YoY) to 77% of our FY21E. The beat came from stronger construction margins. We raise FY21E net profit by 24%, but cut FY22E by 18% partly to incorporate Cukai Makmur. Our new TP is MYR1.69 (+3sen) as we peg on a lower 15x PER on rolled forward FY22E earnings to reflect higher material cost and orderbook risks.