corporate presentation - dec...

Corporate Presentation - Dec 2017

Corporate Profile� Incorporated in 1976 & commenced business in 1981� First listing in year 1997 & delisted in year 2004� Relisting under the construction sector of the Main Market of Bursa Malaysia on 28th July 2015� Cumulative revenue since inception of RM25 bil� Market capitalization: Around RM3.0 bil (Dec 2017 : 9% Foreigner; 25% Bumi and 65% Non Bumi) � Top external shareholders (EPF, Amanah Saham, Great Eastern, Citibank, Eastsrping,CIMB)

Revenu

e Construction Precast90% 10%90% 10%

PATM

IFY 2018

Tan Sri Dato Seri Dr Jeffrey Cheah

Building Construction Services

Foundation and Geotechnical

Engineering ServicesMechanical, Electrical and Plumbing Services

Manufacturing and Sale of Precast Concrete

ProductsCivil/Infrastructure

Construction Services

63.1%

10.06%35.54%

100%

54.4%Other shareholders

100% 100% 100% 100%

� Design and construction service provider in the residential, commercial, institutional and specialty projects

� International portfolio includes several large building construction services projects in Singapore, UAE and Trinidad and Tobago

� Special Purpose Building Projects include Kuala Lumpur Convention Centre, Pinewood Studio, Sunway Medical Centre, MonashUniversity Campus Malaysia; Sunway Shopping Mall

� Major provider of civil/infrastructure construction services and have participated in various roads, highways, airports, bridges and rail transportation infrastructure projects over the last 30 years

� Local Projects include Ipoh Airport, SILK, MajuExpressway, SKVE and special rail transportation infrastructure like MRT, LRT and BRT

� Overseas Projects include 7 highways and bridges in India

� Core services include piling solutions and earth retaining systems

� Services cover all types of buildings such as residential, commercial, institutional, purpose-built or specialty buildings, and civil/infrastructure construction projects.

� Main services are categorised into mechanical, electrical, plumbing and specialisedengineering solutions

� Services offered to both internal and external clients as part of integrated services and on stand alone basis

� Develops, designs, manufactures and supplies precast concrete products with manufacturing plants located in Iskandar and Senai, Johor, Malaysia

� Precast concrete products manufactured, include IndustrialisedBuilding System (“IBS”) components, for residential, commercial and infrastructure development projects.

Integrated Construction Business ModelBuilding Construction

ServicesFoundation and

Geotechnical Engineering Services

Mechanical, Electrical and Plumbing Services

Manufacturing and Sale of Precast Concrete

ProductsCivil/Infrastructure

Construction Services

3

Proven Track Record

2011 to 2014 figures as per prospectus and circular

Post ListingPre Listing28 July 2015

4

Trading Information:-IPO (July

2015)29.12.17

Price (RM) 1.20 2.51Market Capitalisation 1.55b >3.0 b

71 55 67125 127 124 138

9882 90

152 141 154174

2011 2012 2013 2014 2015 2016 2017

PATMI PBT

Strong Financial Performance2012 2013 2014 2015 2016 2017

Audited* Audited* Audited* Audited Audited UnauditedRM mil RM mil RM mil RM mil RM mil RM mil

Revenue 1,448.5 1,839.6 1,880.7 1,916.9 1,788.8 2,076.3

EBITDA 105.0 130.6 192.2 178.2 188.3 202.4PBT 81.9 89.8 152.3 140.8 153.7 174.2PBT % 5.7% 4.9% 8.1% 7.3% 8.6% 8.4%PBT % - Con 4.1% 2.5% 3.2% 3.8% 6.4% 7.6%PBT % - Precast 15.1% 21.6% 39.1% 30.4% 20.3% 19.0%PATMI 54.8 66.9 124.8 127.2 123.5 137.8ROE (%) 9.2% 11.0% 16% 31% 26% 26%

35% mgmt’s commitmentDividend for 2015 : 4 cents or > 40% of full year PATMI Dividend for 2016 : 5 cents or > 50% of full year PATMIDividend for 2017: 7 cents or > 66% of full years PATMI

5

Sound Balance Sheet2012 2013 2014 2015 2016 2017

Audited* Audited* Audited* Audited Audited UnauditedRM mil RM mil RM mil RM mil RM mil RM mil

Shareholders’ Fund 593.0 609.7 328.3 451.7 493.8 554.8

Total assets 1,455.8 1,441.9 1,272.2 1,397.4 1,597.2 1,885.9

Bank borrowings 63.2 90.5 135.2 136.8 136.5 134.7

Cash + Placement 154.3 156.1 291.6 468.5 465.8 487.2

Net Gearing Ratio(times)** N/A N/A N/A N/A N/A N/A

Note : To be read in conjunction with our Combined Audited Accounts.*As per prospectus**Net Gearing Ratio = Net debt / Shareholders’ Funds

6

Investment highlights

Fully Integrated Construction Company


Proven Track Record on the Local & International

Stage

Proven Track Record on the Local & International

Stage

Highly Experienced Senior ManagementHighly Experienced Senior Management

Continuing Support from Sunway Group


Strong Brand Heritage Strong Brand Heritage

1

4

6

5

Solid Order Book of Diversified Projects Across the Construction

Sub-Sector

Solid Order Book of Diversified Projects Across the Construction

Sub-Sector

2

3

7


Well Positioned to Bid for and Undertake Large and Complex Projects Both Domestically & Internationall y to Diversify Risk and Ensure Sustainable Development

Best Practices Across Our Business Division

Best Practices Across Our Business Division

Quality Control Rationalizing

Functions

Consolidating Management

Functions

MaximiseEconomies

of Scale

CENTRES OF EXCELLENCECENTRES OF EXCELLENCE

Maximizing Cost Savings and Improved Operating Efficiencies =

Enhanced Profitability

Operational Efficiency Through Virtual Design and Construction (“VDC”) since 2010

Operational Efficiency Through Virtual Design and Construction (“VDC”) since 2010

VDC

VDC

3D

Comprehensive Parametric Model

Faster Construction Process

4D

Construction Scheduling

Solving Workflow Conflicts

5D

Cost Scenario Analysis

Consolidating Procurement

TIME INTEGRATED 3D MODELS

OPTIMISE PROJECT

RESOURCES

One of the Largest Construction Operations in Malaysia @ Dec 2017

One of the Largest Construction Operations in Malaysia @ Dec 2017

Large Asset Base Allows Us to Maximize Economies of Scale

31 Boring Rigs

26 Excavators7 Skylift

20 Tower Cranes

64,000 M2 System Formworks

5 Launching Girders

11 Crawler Cranes

2 Precast Concrete Plants

Fast Delivery + Cost Effective Procurement + Reduce Project Risks

15 Mobile Cranes

Range of Services Supported by Centres of Excellence, Technology & Large Asset Base

Manufacturing of precast concrete products

Design and management, electrical, mechanical, IT and engineering services

Geotechnical and foundation specialist

with deep and big diameter bored piles

Design & Build of commercial buildings ,

convention centre, theme park and hotel

Civil/Infrastructure Mechanical, Electrical & PlumbingBuilding Geotechnics Precast Concrete

Construction of Infrastructure projects such as highways,

LRT, BRT, MRT, airports, runways and bridges

A Turnkey Contractor with a Full Range of Integrated Services & Products

1

6D

As-Built Model

Project Life-cycle Management

GREATERFACILITIES

MANAGEMENT

5 Passenger Hoist

8

Solid Order Book of Diversified Projects

Healthy Order Book with a Diversified Portfolio of Projects

3%

97%

By CountrySingaporeMalaysia

Order Book Segmentation(YTD 2017)

62%18%

20%

By CustomerPublicPrivateSunway Group

37%

51%

46%

3%

By Business Division

Civil Building Precast

14%

86%

Design & Built vsConventional

D&BConventional

2

9

Proven Track Record on the Local & International Stage

Malaysia

IndiaUAE

LRT Package B

Completed : 2015Value: RM569mil

Trinidad and Tobago

Klang Valley MRT Package V4

Completed : 2016Value: RM1,172mil

Kuala LumpurConvention CentreCompleted: 2005Value: RM549mil

HDB – Bukit Merah

Completed: 2016Value: SGD31mil

Phase 1A, Rihan Heights, UAE

Completed: 2010Value: US$510 mil

East-West CorridorUttar Pradesh, India


Ministry of LegalAffairs


Phase 1, Plot 1Al-Reem Island


Singapore

Successfully Secured & Executed Major Projects both Domestically & Internationally.. Whilst Building Long Lasting Relationships

Established Ourselves as a Reputable Construction Player with Both the Private & Public Sector

� Relationship >10 years � 9 Major Projects� Value >RM3.0 bil

� Relationship >20 years � 15 Major Projects� Value of Major Projects of more

than RM3.0 bil

� Relationship >10 years � 5 Major Projects� Value >RM1.3 bil

� Relationship >4 years � >2 Major Projects� Value >RM300 mil

� Relationship >3 years � 4 Major Projects� Value of >RM3 bil

� Relationship >3 years � 1 Major Project� Value >RM300 mil

� Relationship >5 years � 3 Major Project� Value >RM2.6 bil

IDR Asset

KLCC Group of Companies

PutrajayaHoldings

Syarikat Prasarana

Negara

Iskandar Malaysia Studios

3

10

MMC Gamuda

Proven Operating

Success

Heritage of Over 30 years

Excellent Reputation

Strong Brand Heritage Which Led to an Established Multi-Award Winning Brand…Proven Capabilities…

Leverage on the “Sunway” Brand

4

“We are the only Construction company under the FTSE4Good”

2017• 6 Dec 2017 : MSWG-ASEAN

Corporate Governance Recognition 2017 – Industry Excellence Award (Property and Construction)

• 23 Nov 2017 : National Annual Corporate Report Awards (NACRA) 2017 – Certificate of Merit

• 24 Aug 2017 : MSOSH OSH Awards 2016. 5 Gold and 1 Silver award

• 8 Aug 2017 : MICG Top 100 listed companies in Transparency in Corporate Report. SunCon 4th

placing behind Petronas’s 3 companies and ahead of Maybank.

• 16 May 2017 : MBAM Health and Safety Award. SunCon won under 2 category : Golden Helmet Award (Dato Johari) and Site Personnel Award (Teh Hang Loong)

• 10 Jan 2017 : ACCA Malaysia Sustainability Reporting Awards (MaSRA) 2016 – 24 out of 49 participants 11

Past notable winning • Builders’ of the Year Award

(2003, 2005 and 2013)• 5-Star ratings in CIDB’s SCORE• Programme 2015 (Sunway

Construction Sdn Bhd & Sunway Engineering Sdn Bhd

• SG50 Prestige Award 2015 (Sunway Concrete Products)

• The Malaysian Construction Industry Excellence Award 2012(International Achievement

Award)

2018

• 25 Jan 2018: ACCA Malaysia Sustainability Reporting Awards (MaSRA) 2017 –Commendation Award –Knowledge Management

Continuing Support from Sunway GroupSunway Group Strategic Relationship

Our Key Developments with Sunway Group Sunway Group’s Continued Support

Ongoing Projects

Feb 2018 successfully secured RM497 mil worth of orders fromSunway Group�

Major property developer in Malaysia with revenueat 2016: RM1.2b from its property divisions

2018 Launch Target RM2.0b (plus RM610m PIprojects) – (2017 : RM1.1b, 2016 : RM0.65b, 2015 :RM1.4 bil)Sales target 2018 – RM1.3b (2017 : RM1.1b; 2016 :RM1.2b, 2015 : RM1.2b)At least 51% stake in Suncon Group post IPO

Competitive advantage in propertydevelopment – design optimization,assurance on quality & timeliness

Portfolio of diversified servicesacross the construction sub-sector

Revenue contribution

Sunway Pyramid

Sunway Medical Centre

Sunway Geo Suites

Sunway Lagoon

Sunway Serene, Kelana Jaya

Sunway Velocity Hospital

Symbiotic Relationship with Sunway Group Provides Stability During Periods of Downturn

Bed rock orders evenduring a decline in theconstruction sector

Total gross development value of remaininglandbank (3,305 acres) Johor 56%, Klang Valley30%, Penang 6%– RM53 bil (15 years)

62% 61% 60% 74%

38% 39% 40% 26%

FYE2014 FYE2015 FYE2016 FYE 2017

Others Sunway Group

5

Emerald Residence

Sunway Carnival Mall

12

2017 : reduced reliance on in-house jobs�

Highly Experienced Senior ManagementWhich Led to an Established Multi-Award Winning Brand…Proven Capabilities…

Extensive Industry Expertise and Strong Execution Capability with an Average of Over 23 Years of Experience in the Construction Industry

Designation : Advisor

Years in Suncon Group

: > 20 years

Construction Industry Experience

: 40 years

Ng Bee Lien

Liew Kok Wing

Designation :Chief Financial Officer


: 12 years


: 20 years

Designation :Deputy ManagingDirector


: 20 years


: Over 20 years

Evan Cheah

Designation :ExecutiveDirectorBuilding Division


: 17 years


: Over 28 years

Designation :Managing Director


: 20 years


: Over 20 years

Chung Soo Kiong

Thomas SamuelDesignation :Executive

Director Sw.Geotechnics


: Since 2015


: Over 33 years

Designation :Senior GMMEP Division

Years in SunconGroup

: 16 years


: Over 19 years

6

Designation :Non-Independent Non-Executive Director


: 15 years


: Over 15 years

Richard Wong Eric Tan Chee HinKwong Tzyy En

Datuk Kwan Foh Kwai

Designation :ExecutiveDirector Precast Division


: 15 years


: Over 20 years

13

� High Return on Equity (> 25%)� Sound balance sheet with net cash position� 35% dividend policy (2015 : > 40%, 2016 : > 50%, 2017 : > 60%) 14

Key Takeaways� Integrated business model providing end-to-end design and construction solutions� VDC enabled � Well supported by investment in capex and assets previously

Fully integrated Construction

Company

Solid Order Book� Strong order book & tender book with diversified construction capabilities across

various sub – segments of the construction sector� Proven Track Record in the Local & International Stage� History of repeat order from reputable clients with high credit worthiness

Positioned for Growth

� The largest pure play listed construction company in Malaysia� Top 3 construction group by turnover and profit� Strong construction growth in Malaysia (RMK 11)� Strong contender for infrastructure projects including MRT 3 Circle Line 40km RM40b,

HSR 350km RM60b (PDP Role), ECRL 55b, BRT Iskandar and future rail projects� Construction sector growth in 2017 : 6.7%; 2016 : 7.4% ; 2015 : 8.2%� Singapore Precast : JV with Hong Leong to tender for ICPH (will double capacity)


� At least 51% stake in Suncon Group post IPO� Bed rock orders even during a decline in the construction sector� Treasury support from Sunway Bhd

Financial

Civil/Infrastructure ConstructionLRT 3 (GS0708) : RM2.18b : 9.2km (Kaw 17 to Taman Sri Andalas)

Secured on 6 Oct 2017

15

Job Scope :• 9.2km of viaduct works • 6 stations works • 1 cable-stayed bridge over Klang River (Design & Build)• 2 Park & Ride at Pasar Besar Klang and Sri Andalas• 1 Centralised Labour Quarter at Johan Setia

LRT 3 will be our 4th elevated rail project since 2011. This project will showcase our fully integrated capabilitiesin foundation and geotechnical, civil infrastructure, building construction services and MEP expertise.

Civil/Infrastructure ConstructionKlang Valley MRT Package V4

Contract Value : RM1.17 bil (6.6km)Client : MMC Gamuda

KVMRT (PDP) Sdn BhdCompletion Year : 2016

MRT 2 : V201 (4.9km) + VO (0.7km) : RM1.27bDuration : 60 months (completion May 2021)Job Scope : Construction and Completion of Viaduct Guideway from Sungai Buloh to Persiaran Dagang and Advance Work Construction of Viaduct Guideway between Kampung Muhibbah to Serdang Raya . Works involves 3 nos station, 142 nos piers, 180 km telco fibreoptic relocation, 21.5 km underground HT cables relocation, 5.4 km water pipe relocation and 701 nosbored piles

16

Building Construction – Central

Contract Sum : RM1.6 bil(34 acres, GFA = 445,170 sqm)

Client : Putrajaya Bina Sdn BhdCompletion Year : 1Q2019

PARCEL F, Precinct 1

17

Building Construction - Central

KLCC Car Park – 6 level of basement646m (2Q 2018)

ISKL268m (95,000M2), 3Q 2018

• Green Building Index Platinum Rated Building• The scope of work includes the proposed

construction of 5 teaching facilities for Early Years, Elementary, Middle and High school students, a main building which has a theatre, libraries, gym, kitchen & dining, a performance art centre and sport facilities which includes a fitness centre, swimming pool, track, tennis and basketball court amongst others to create the most advanced learning environment accommodating a max capacity of 2,500 students. 18

Building Construction – Southern

19

Afiniti Medini mixed development 283m (2016)

Citrine mixed development213m (1Q 2017)

Legoland Theme Park + Water Theme Park, 303m (2012 / 2013)

Pinewood Iskandar Studio309m (2013)

Building Construction – In House

20

Sunway Velocity Ph2 Mall350m (2016)

Sunway Medical 3 & 4595m (4Q 2018)

Sunway Geo Retails Shops & Flexi Suites Phase 1&2397m (1Q 2018)

20

Overseas ProjectsAl-Reem Island – Abu

DhabiAED1.33b (2009)

Rihan Heights project –Abu Dhabi

AED1.88b (2010)

RJ9 Kalisindh Bridge – the longest bridge in the state of Rajasthan

INR 2,866,500,000(2008)

Ministry of Legal Affairs Tower – Trinidad and Tobago

TT368m (2010)

21

Mechanical, Electrical and PlumbingDistribution Pipe, Bio-Xcell

75m (2014)Gas District Cooling Plant (Putrajaya)

49m (2011 / 2015)

22

Precast Concrete Products

Precast water tank Precast wall/column Refuse chute

Household shelters Iskandar Precast Plant Prefabricated toilet

Facade Lift well and lift cover Precast beam / column 23

Precast – installation in M3 Iskandar

24

Precast – Capacity & Cost Component Plant Area (sq. ft.)

Max Annual Capacity

(m3)

Utilisationrate 2017

(%)

Utilisationrate 2016

(%)No. of lines

Senai Plant (own)

Oct 2012

Built up area : 262,231

Land area : 475,409

75,000 52.7% 57% 6+3 (half) lines

IskandarPlant

(rented)

Land area : 9hectares

81,600 45.3%22%

Commenced 3Q 2016

9 lines

HDB BTO Launch � 201 = 17,000 nos (2017 : 17.593; 2016 17,891; 2015 : 15,100 ; 2014 : 22,455)Capacity building� Further mechanization of Senai Plant to commence in FYE 2018 with an anticipated cost of RM40m (Flying bucket, carousel system, concrete distributor, compacting equipment, plotter, shuttering and stripping robot, pallet cleaning and release agent spraying equipment, pallet stacker, tilting equipment, curing chamber and run-off carriage) increasing the current capacity by approximately 25%Going forward � Participate in ICPH (Integrated Construction Precast Hub) in Pulau Punggol Barat costing SGD40m during the 3 years construction period for a 30 years lease for a fully automated robotic precast plant Opportunities � HDB will implement prefabricated bathroom units (PBU) for all Singapore new flats by 2019. 25

Potential Key Risk

26

Potential Risk Potential Impact Controls to Mitigate RiskFluctuation of material price – steel rebar

Steel bar priceDec 2017 : RM 2,583/mtJan 2018 : RM 2,677/mt

• Bulk locked-in steel rebar in advanced at lower prices or when price is favorable.

• Forward-looking steel rebar requirement (approximately 6 months in advanced).

Foreignworkers levy

RM 1,850p.a. for 600 direct workers. Cost impact: RM1.1mil

• Manage foreign workers efficiently as the cost on existing direct workers (600pax) are fixed.

• Levy cost will be factored in in new tender. Foreign currency fluctuation

Importation of special lightings, furnishing & façade components

• FOREX hedging in advance once design and bill of quantity is confirmed.

• FOREX rates are fixed upfront at the contractual level.

1,447

2,269 2,224

1,991

2,130

2,425

2,603

2,348

2,583

2,677

1,400.00

1,600.00

1,800.00

2,000.00

2,200.00

2,400.00

2,600.00

2,800.00

JAN

14FE

B 14

MAR

CH 1

4AP

R 14

MAY

14

JUNE

14

JULY

14

AUG

14SE

PT 1

4OC

T 14

NOV

14DE

C 14

JAN

15FE

B 15

MAR

CH 1

5AP

RIL 1

5M

AY 1

5JU

NE 1

5JU

LY 1

5AU

G 15

SEPT

15

OCT

15NO

V 15

DEC

15JA

N 16

FEB

16M

ARCH

16

APRI

L 16

MAY

16

JUNE

16

JULY

16

AUG

16SE

PT 1

6OC

T 16

NOV

16DE

C 16

JAN

17FE

B 17

MAR

CH 1

7AP

RIL 1

7M

AY 1

7JU

NE 1

7JU

LY 1

7AU

G 17

SEPT

17

OCT

17NO

V 17

DEC

17JA

N 18

MONTHLY AVERAGE (RM/MT)

New Order Book 2018 Secured YTD

New order 2017 : 4.0b, 2016 : 2.7b, 2015 : 2.6b, 2014 : 0.8b, 2013 : 2.9b, 2012 : 1.9bOutstanding Order book 2017 : 6.1b, 2016 : 4.8b, 2015 : 3.8b, 2014 : 3.0b,

2013 : 3.2b, 2012 : 4.1b

Target NEW order book for FYE 2018 : RM 1.5b to RM 2.0b

27

Projects (2018 new awards) Client DurationContract

Sum (RM'mil)

Sunway Carnival 2 Extension, Seberang Perai, Penang - PDP contract

Sunway REITS Mgmt Sdn Bhd

32 months 274

SunGeo Lake 44 storey residential tower at Sunway South Quay. 44 storey/420 units with 44 units of 3 storey townhouse including facility floor and 3 basement carpark

Sunway South Quay Sdn Bhd

36 months 223

Precast Various 45 Grand Total 541

This presentation may contain certain forward looking statements due to a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions; interest rate trends; cost of capital and capital availability including availability of financing in the amounts and the terms necessary to support future business; competition from other companies, changes in operating expenses including employee wages, benefits, government and public policy changes. You are cautioned not to place undue reliance on these forward looking statements which are based on Management's current view of future events. Past performance is not necessarily indicative of its future performance

Thank You

ISKL Project Progress @ September 2017

corporate presentation - dec...

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